Lululemon Stock Tumbles as Weak Outlook Overshadows Solid Q4

Shares of apparel retailer Lululemon Athletica (LULU) sank early Friday as a soft outlook outweighed an estimate-topping fourth quarter reported after the bell Thursday.

For the quarter that ended Feb. 2, Lululemon reported earnings of $6.14 per share on revenue of $3.61 billion. Analysts had forecast EPS of $5.88 on $3.58 billion in sales, according to estimates compiled by Visible Alpha. The results managed to top estimates despite comparable store sales falling short of estimates at 3%.

Lululemon said it expects first-quarter EPS of $2.53 to $2.58 on revenue of $2.34 billion to $2.36 billion, and full-year EPS between $14.95 and $15.15 on revenue of $11.15 billion to $11.3 billion. All four metrics were below consensus forecasts.

“Consumers are spending less due to increased concerns about inflation and the economy,” Lululemon CEO Calvin McDonald said in Thursday’s earnings call, according to an AlphaSense transcript. “This is manifesting itself into slower traffic across the industry in the US in quarter one, which we are experiencing in our business as well.”

Lululemon shares were down 11% Friday morning, on track for their lowest open since November 2024.

Analysts Cut Price Targets For Lululemon

Analysts from JPMorgan and UBS on Friday each cut their price targets for Lululemon stock to $391 with an “overweight” rating and $335 with a “neutral” rating, respectively.

UBS analysts said that Lululemon “looks decreasingly capable” of delivering on previously projected growth rates of double-digit EPS growth per year. JPM analysts said that executives noted a downward trend in traffic across the industry entering the first quarter, and that tariffs and currency exchange rates could hurt the company’s profit margins in 2025.