Lululemon Faces Challenges but Shows Turnaround Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 22 2026
0mins
Should l Buy LULU?
Source: Fool
- International Growth: Lululemon's international sales grew 21% last year on a constant-currency basis, indicating strong brand appeal abroad, particularly in China, which is expected to drive overall revenue growth and offset sluggish performance in the Americas.
- Management Outlook: Although management anticipates only 2% to 4% revenue growth in 2026 and an 8% decline in earnings per share (EPS), the company is focused on improving its North American business by reducing inventory markdowns through shorter lead times for new products, aiming to enhance profitability.
- Brand Strength Maintained: Lululemon continues to uphold its brand strength associated with quality and innovation, which not only attracts loyal consumers but also lays the groundwork for future sales growth, particularly in expanding men's products and footwear categories.
- Investment Opportunity Emerges: Despite the stock trading at 13.5 times the midpoint of management's EPS guidance, reflecting low market expectations for a near-term turnaround, the brand's strength and progress in international markets suggest that investors may find a good opportunity to buy before a significant rebound in financial results.
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Analyst Views on LULU
Wall Street analysts forecast LULU stock price to rise
22 Analyst Rating
1 Buy
21 Hold
0 Sell
Hold
Current: 145.850
Low
146.00
Averages
207.12
High
303.00
Current: 145.850
Low
146.00
Averages
207.12
High
303.00
About LULU
lululemon athletica inc. is a technical athletic apparel, footwear, and accessories company. The Company organizes its operations into four regional markets: the Americas, China Mainland, Asia Pacific (APAC), and Europe and the Middle East (EMEA). It conducts its business through a number of different channels in each market, including the Company-operated stores, e-commerce, temporary locations, wholesale, outlets, a re-commerce program, and license and supply arrangements. The Company offers a comprehensive line of technical athletic apparel, footwear, and accessories marketed under the lululemon brand. Its apparel assortment includes items such as shorts, tops, and jackets designed for a healthy lifestyle, including athletic activities such as yoga, running, training, and most other activities. It also offers apparel designed for being on the move and fitness-inspired accessories. It operates stores in the United States, Canada, China Mainland, Australia, South Korea and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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