Key Stats for Lululemon Stock
- Pre-market Price Change for Lululemon stock: 9%
- $LULU Share Price as of Dec. 11: $187
- 52-Week High: $423
- $LULU Stock Price Target: $190
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
Lululemon (LULU) stock is up 9% in pre-market trading despite posting another quarter of weak results and guidance.
The surprise rally came after the company announced CEO Calvin McDonald will step down effective January 31, following more than a year of underperformance at the athleisure retailer.
For the fiscal third quarter, LULU stock beat earnings expectations, reporting $2.59 per share versus the $2.22 estimate, and revenue came in at $2.57 billion compared to the $2.48 billion estimate.
However, net income fell to $307 million from $352 million a year ago, and comparable sales in the Americas dropped 5%.
The company’s fourth-quarter guidance disappointed Wall Street. Lululemon expects revenue between $3.50 billion and $3.59 billion, below the $3.60 billion estimate. Earnings per share are forecast at $4.66 to $4.76, well short of the $5.03 consensus.
McDonald said the company saw strong Thanksgiving weekend traffic, which helped clear seasonal inventory. But he acknowledged that “trends have slowed a bit since Thanksgiving,” which was taken into account in the cautious Q4 outlook.
CFO Meghan Frank and Chief Commercial Officer André Maestrini will serve as interim co-CEOs while the board searches for a permanent replacement. Board chair Marti Morfitt will expand her role to executive chair during the transition.
See analysts’ growth forecasts and price targets for LULU stock (It’s free!) >>>
What the Market Is Telling Us About Lululemon Stock
The positive reaction to LULU stock suggests investors view the CEO’s departure as a necessary step toward revitalizing the struggling brand.
The move comes after founder and largest independent shareholder Chip Wilson took out a full-page Wall Street Journal ad two months ago calling the company “in a nosedive” and urging management to refocus on customers.
Lululemon faces multiple headwinds, including tariff pressures, weak U.S. consumer spending, and a product assortment that hasn’t excited shoppers lately.
The company is being hit particularly hard by the end of the de minimis exemption, which previously allowed low-value packages to enter the U.S. duty-free. Tariffs are now expected to reduce full-year profits by $210 million, down from an earlier estimate of $240 million.
The company outlined a three-pillar action plan to drive improvement: product creation, with 35% new styles coming in spring 2026; product activation through improved in-store experiences and marketing; and enterprise efficiency to offset tariff costs.
International momentum remains strong, with China revenue up 46% and comparable sales rising 25% in the quarter. But the Americas region, which represents Lululemon’s largest market, continues declining with revenue down 2% and comparable sales down 5%.
Frank acknowledged that operating margins will face pressure in 2026 from a full year of tariffs, though the company is working on mitigation strategies.
She said the team is taking a “more conservative posture” on inventory planning to increase full-price penetration and reduce markdown risk.
Investors should watch whether the leadership change and upcoming product refreshes can reverse the negative trends in LULU stock in its core U.S. market.
Estimate a company’s fair value instantly (Free with TIKR) >>>
How Much Upside Does LULU Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
