The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
| Factor | Score | Distribution | Value | Avg | Verdict |
|---|---|---|---|---|---|
Valuation | 71 | 9.6x | 20.3x | Above average | |
Growth | 49 | 4.2% | 5.6% | Near average | |
Quality | 67 | 34.1% | 7.6% | Near average | |
Safety | 51 | 0.3x | 0.4x | Near average | |
Capital Return | 14 | — | 2.15% | Below average | |
Momentum | 14 | — | — | Below average | |
Sentiment | 69 | — | — | Above average |
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Lululemon Athletica Inc. (LULU) is a leading global brand in the design and distribution of premium athletic apparel and equipment, focusing primarily on apparel for running, training, yoga, and high-sweat activities. Its business model is built on direct-to-consumer sales through its physical store network, which reached 811 stores worldwide, alongside its digital e-commerce platforms.
During the fourth quarter of fiscal year 2025, Lululemon achieved total revenue of $3.6 billion, representing a 1% growth compared to the previous year (or 6% when excluding the 53rd week of the prior year). Fourth-quarter net income reached $587 million, with earnings per share of $5.01. The company recorded a gross margin of 54.9% compared to 60.4% in the same period last year, impacted by an increase in markdowns and tariff pressures.
For the full fiscal year 2025, annual revenue reached $11.1 billion and net income was $1.6 billion, achieving diluted earnings per share of $13.26. Digital channels were a key contributor to the results, accounting for $1.9 billion of total fourth-quarter sales.
Lululemon Athletica Inc. stock currently trades at a price of $125.39, which is clearly below the average analyst consensus price target of $200.57, and is even close to the lower limit of the price target range of $130, while the upper limit of analyst forecasts stands at $250. The current analyst consensus reflects a general recommendation of Neutral toward the stock in light of temporary operational challenges in North America.
The company expects full-year 2026 revenue to range between $11.35 billion and $11.5 billion, representing growth of 2% to 4% compared to 2025. On the earnings front, the company expects diluted earnings per share to range between $12.10 and $12.30, which represents a decline compared to the earnings per share of $13.26 recorded in 2025. This decline is primarily due to margin pressures, investment costs, and operational restructuring.
The company is implementing a rigorous action plan aimed at reducing markdowns and returning to full-price sales growth in North America. This plan relies on raising the percentage of entirely new products in stores to 35%, reducing the number of stock-keeping units (SKU reduction), and keeping unit inventory volumes flat to slightly down during 2026. Management expects full-price sales to begin turning to positive year-over-year growth starting in the second quarter of 2026.
Total tariff costs reached $275 million in 2025, and the company managed to offset $62 million of this through mitigation strategies. For 2026, the company expects the total tariff impact to increase to $380 million. The company plans to counter this impact by achieving $160 million in savings through enterprise and supply chain efficiency initiatives to reduce the pressure on gross profit margin.
Automated analysis for informational purposes only — not investment advice.
Lululemon plans to open between 40 and 45 new company-operated stores globally during 2026, alongside executing 35 optimizations and expansions of existing stores. This expansion will include opening approximately 15 stores in North America, with the majority concentrated in Mexico through the opening of 8 stores, while between 25 and 30 stores will be directed to international markets, with the largest portion allocated to the People's Republic of China.
The company expects its first-quarter 2026 operating margin to decline by 710 basis points compared to the prior year. This decrease is due to increased marketing costs associated with major sporting events, such as sponsoring the BNP Paribas tennis tournament and the Milan Olympics, in addition to reintroducing certain previously reduced expenses such as employee incentives and store hours, along with exceptional costs associated with this year's proxy contest.