Results: Lululemon Athletica Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a pretty great week for Lululemon Athletica Inc. (NASDAQ:LULU) shareholders, with its shares surging 19% to US$400 in the week since its latest third-quarter results. The result was positive overall - although revenues of US$2.4b were in line with what the analysts predicted, Lululemon Athletica surprised by delivering a statutory profit of US$2.87 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Lululemon Athletica after the latest results.

See our latest analysis for Lululemon Athletica

Taking into account the latest results, the most recent consensus for Lululemon Athletica from 33 analysts is for revenues of US$11.3b in 2026. If met, it would imply a meaningful 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 5.7% to US$15.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.2b and earnings per share (EPS) of US$14.88 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 15% to US$365despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Lululemon Athletica's earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Lululemon Athletica, with the most bullish analyst valuing it at US$440 and the most bearish at US$194 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Lululemon Athletica's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 8.9% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.1% annually. So it's pretty clear that, while Lululemon Athletica's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Lululemon Athletica going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.