Lululemon Stock (LULU) Rebounds Toward $190 as Q3 2025 Earnings Loom: Is the 50% Sell‑Off Overdone?

Date: December 6, 2025
Ticker: LULU (NASDAQ)

Lululemon athletica inc. stock has spent most of 2025 in the market’s penalty box. After being one of Wall Street’s darlings for a decade-plus, the athleisure giant is now trading at valuations it hasn’t seen since its early days—despite still posting high-teens returns on capital and double‑digit margins. ^[1]

In the latest session (Friday, December 5), LULU closed around $190.01, up roughly 3.5% on the day, aided by a broader retail bounce and improving sentiment around the U.S. consumer. ^[2] Yet year‑to‑date the stock is still down about 50–57%, depending on the starting point you use—one of the steepest drawdowns in the S&P 500 this year. ^[3]

With Q3 fiscal 2025 results due on December 11, and the company already having cut its full‑year outlook because of tariffs and slowing U.S. demand, investors are split: is this finally a bargain, or just a slow‑motion rerating of a brand losing momentum? ^[4]

Below is a deep dive into where Lululemon stands today, what has changed in 2025, and how the latest forecasts and analyses are framing the next move in LULU stock.

Lululemon Stock Today: Price, Performance and Valuation Reset

At Friday’s close near $190, Lululemon is trading: ^[5]

• Around 55–60% below its late‑2023 peak (over $500 a share). ^[6]
• Within a 52‑week range of roughly $159 to $423, much closer to the low end than the high. ^[7]
• On a trailing P/E of ~13x and forward P/E around 15–16x, based on TTM EPS of about $14.7 and consensus estimates. ^[8]

For a company that spent much of the last decade trading at 40x+ earnings, the multiple compression is brutal. Several valuation trackers peg Lululemon’s 5‑ to 10‑year average P/E in the low‑40s, with the ratio spiking far higher at the 2021–2023 peak. ^[9]

Other valuation metrics tell the same “from premium to merely normal” story:

• Price‑to‑sales has fallen to around 2x, versus a 5‑year average near 5x. ^[10]
• Price‑to‑free‑cash‑flow is now in the mid‑teens, down from the 40s over the last cycle. ^[11]
• Reuters puts Lululemon’s forward P/E at roughly 14x, compared with nearly 39x for Nike, flipping the old script where LULU traded at a hefty premium to legacy sportswear brands. ^[12]

On pure numbers, this is the cheapest Lululemon has looked in decades. The market, in other words, no longer assumes “permanent hyper‑growth yoga kingdom.”

What Went Wrong in 2025: Guidance Cuts, Tariffs and a Slower U.S. Consumer

The stock’s slide in 2025 wasn’t random—Lululemon gave investors several reasons to hit the sell button.

Q2 2025: Solid Growth, Ugly Mix

In Q2 fiscal 2025 (quarter ended August 3), Lululemon reported: ^[13]

• Net revenue up 7% to $2.5 billion (6% in constant currency).
• Comparable sales up 1% overall.
  • Americas comps fell 4%.
  • International comps jumped 15%.
• Gross margin dipped about 110 basis points to 58.5%.
• Operating margin slid roughly 210 bps to 20.7%, and EPS slipped to $3.10 from $3.15 a year earlier.

CEO Calvin McDonald acknowledged that the company was “disappointed” with U.S. results and aspects of product execution, even as international regions continued to perform strongly. ^[14]

Tariffs and Outlook Cut: The Real Gut Punch

The top‑line numbers weren’t disastrous; the outlook was. In that same Q2 release, Lululemon: ^[15]

• Cut full‑year 2025 revenue guidance to $10.85–11.0 billion, just 2–4% growth (4–6% excluding 2024’s extra 53rd week).
• Slashed 2025 EPS guidance to $12.77–12.97, implying a double‑digit decline versus 2024.
• Flagged an estimated $240 million hit to 2025 gross profit from higher U.S. tariffs and removal of the de minimis import exemption, with the tariff impact potentially rising to $320 million in 2026 if conditions persist. ^[16]

Investors hate two things: slowing growth and shrinking margins. Lululemon offered a combo platter. Shares dropped as much as 20% in the immediate aftermath of the June and September guidance resets, and Reuters noted that by early September the stock was already down about 40% year‑to‑date. ^[17]

The Business Under the Hood: Still Growing, Just Not Like 2021

The tough part for investors is that Lululemon is not a broken business. It’s a still‑profitable, still‑growing business that suddenly looks mortal.

A recent breakdown of Lululemon’s growth trajectory shows: ^[18]

• Revenue growth slowed from 30% (FY 2022) → 19% (FY 2023) → 10% (FY 2024) → ~7% in Q1 and Q2 2025.
• Comparable sales growth fell from mid‑teens to about 1% this year.
• Gross margin peaked above 59% and has drifted back toward the 58% range, still excellent but no longer expanding.

The problem is heavily skewed to North America:

• Americas revenue grew just 1% in Q2 2025, with negative comps.
• International revenue climbed 22%, with mid‑teens comps, highlighting how much of the growth now comes from outside Lululemon’s home market. ^[19]

Management is still leaning on its “Power of Three x2” strategy: doubling men’s and digital revenue and quadrupling international revenue from 2021 to 2026, with a long‑term revenue target around $12.5 billion. The company reiterated that goal even after trimming near‑term guidance, but Wall Street is more skeptical, modeling slower mid‑single‑digit growth in the next couple of years. ^[20]

The result: a company that still looks structurally profitable and globally relevant, but not obviously deserving of the old “luxury SaaS‑like multiple” it once enjoyed.

Fresh Developments This Week (Through December 6, 2025)

A lot has happened around LULU in just the last few days. Here’s what’s new as of today.

1. Short‑Term Price Action: Retail Sympathy Rally

On December 5, Lululemon shares jumped more than 4% intraday, finishing up about 3.2–3.5% as they closed near $189–190. A report from StockStory attributed the pop largely to stronger‑than‑expected results and raised guidance from Dollar General, which reassured investors that U.S. consumers are still spending. ^[21]

The move doesn’t fundamentally change Lululemon’s story, but it shows how jumpy the stock is: by StockStory’s count, LULU has had double‑digit instances of 5%+ daily moves over the past year, underscoring elevated volatility. ^[22]

2. Social Media & Alt‑Data: NFL Partnership vs. Confidence Crisis

Quiver Quantitative’s analysis of X (Twitter) chatter over the past month paints a picture of a battleground stock: ^[23]

• Most posts fixate on the 50%+ year‑to‑date decline, slowing Americas sales and intensifying competition.
• A brighter spot: Lululemon’s new NFL partnership, which launched team‑branded apparel for all 32 teams and briefly boosted the stock by over 3% when announced.
• The debate online largely mirrors Wall Street: some see a structurally strong brand facing temporary macro and product challenges; others see a former category killer whose “cool factor” is slipping.

Quiver also highlights that:

• Insiders have been net sellers, including CEO Calvin McDonald and Chief Brand Officer Nicole Neuburger.
• A large number of institutional holders reduced their stakes in Q2 2025, with some major asset managers cutting their LULU positions dramatically, even as a handful of hedge funds added. ^[24]

It’s not exactly the “all‑in” signal nervous shareholders want to see.

3. Big Pension Fund Trims Exposure

In a filing summarized by MarketBeat on December 4, the New York State Common Retirement Fund reported that it cut its Lululemon position by 53.9%, selling about 80,000 shares and leaving itself with roughly 0.06% of the company (68,607 shares) worth about $16.3 million. ^[25]

The same piece reiterates that: ^[26]

• Q2 EPS of $3.10 beat estimates, but revenue slightly missed.
• Management’s Q3 EPS guidance is $2.18–2.23 on $2.47–2.50 billion of revenue.
• The average analyst rating is “Hold”, with a consensus price target around $227–228—about 20% upside from current levels.

Institutional investors aren’t fleeing en masse—about 85% of shares are still institutionally held—but there is clearly a rebalancing away from LULU among some large funds. ^[27]

4. Leadership Shake‑Up: President of the Americas Exits

Two weeks ago, Lululemon announced that Celeste Burgoyne, President of the Americas and Global Guest Innovation, will leave the company at the end of December for a new opportunity outside the industry. ^[28]

At the same time, André Maestrini, previously Executive Vice President of International, was promoted to President and Chief Commercial Officer, with integrated oversight of all regions, stores and digital channels globally. Management framed the move as a way to unify strategy and accelerate best‑practice sharing across North America and international markets. ^[29]

This change lands on top of earlier senior‑team turnover (including the departure of long‑time Chief Product Officer Sun Choe in 2025) and growing public criticism from founder Chip Wilson, who has accused the current leadership of diluting the brand—coverage that’s made it as far as the Wall Street Journal. ^[30]

Leadership transitions are not inherently bearish, but in a year when the stock has been cut in half, they add to the “confidence overhang” argument.

5. Contrarian Bull: Michael Burry’s Big Bet

On the more optimistic side of the ledger, Michael Burry—of The Big Short fame—has publicly revealed LULU as one of his key stock picks. Coverage of his disclosures notes that he sees Lululemon as a multi‑year opportunity, effectively betting that today’s battered valuation over‑discounts the brand’s long‑term power. ^[31]

Burry’s bullish stance doesn’t change the fundamentals, but it reinforces the idea that sophisticated value investors are starting to see Lululemon as a classic “great company, terrible year” situation.

6. Fresh Takes: Mispricing vs. Confidence Crisis

Two of the newest in‑depth analyses published this week illustrate how divided the commentariat is:

• AInvest (Dec. 6) argues that Lululemon may be a “mispriced opportunity” after a 47% 52‑week decline. The article highlights:
  • Restructuring of the product leadership team to emphasize “seasonal newness.”
  • A $1 billion share repurchase expansion, signaling management confidence.
  • Strong operating margins and high returns on equity despite recent EPS volatility. ^[32]
    The piece concludes that if Lululemon can reignite U.S. demand, innovate product more effectively and manage tariffs, today’s valuation could prove attractive.
• TipRanks (earlier this week) takes the opposite view, calling Lululemon’s situation a “confidence crisis” that cheap valuation alone can’t fix. The author points to:
  • Misalignment within the board and leadership and public pushback from the founder.
  • Brand erosion as consumers either trade down to cheaper look‑alikes (Costco, Amazon, Target, Shein) or up to aspirational rivals (Alo Yoga, Vuori, On Running).
  • A shift from 20–30% revenue growth to mid‑single‑digit forecasts through 2027. ^[33]
    The verdict there: the stock still deserves a Sell rating until leadership and strategic clarity improve.

In other words, you can find a polished argument for both “deep value opportunity” and “classic value trap” using the same data set.

Analyst Consensus: A Boring Word for a Very Excited Debate

Despite all the drama, the Street’s official stance on Lululemon is surprisingly middle‑of‑the‑road.

Across major aggregators: ^[34]

• Rating: Most services classify LULU as a “Hold.”
• Number of analysts: Roughly 25–30 covering the stock.
• Average 12‑month price target: Around $225–230, implying ~20% upside from the current price.
• Target range:
  • High: Up to $400–420 (bullish analysts like BTIG still see big upside).
  • Low: Around $120, where the most pessimistic houses think the market might reprice the stock if the turnaround stalls.

QuiverQuant’s compilation of recent targets shows some notable dispersion: BTIG at $303 (Buy), Jefferies at $120 (Underperform), and a cluster of firms in the $175–200 zone with “Market Perform” or “Neutral” ratings. ^[35]

For Q3 fiscal 2025, consensus expectations sit roughly at: ^[36]

• EPS: About $2.20–2.22, down year‑on‑year.
• Revenue: Just under $2.5 billion, in line with management’s own guidance of $2.47–2.50 billion.

The setup going into the December 11 earnings call is classic “show me”: the bar is not absurdly high, but patience is thin.

The Bull Case: High Margins, Global Runway, Rare Valuation

Supporters of LULU right now tend to make a few core arguments.

1. The Business Is Still Exceptionally Profitable

Even in a disappointing year, Lululemon is posting: ^[37]

• Gross margins near 58–59%.
• Operating margins around 20%.
• Return on equity in the high‑20% to low‑40% range.
• Strong free cash flow generation and a sizable cash balance, which has helped fund both growth and share repurchases.

That combination of margin and capital efficiency is rare in apparel retail. It’s one reason why articles from outlets like Morningstar and some Motley Fool contributors still describe Lululemon as a fundamentally “attractive” business whose stock has overshot on the downside. ^[38]

2. International and Men’s Still Have Long Runways

While the U.S. women’s business looks stale, international regions and men’s remain bright spots:

• Q2 2025 international revenue was up 22%, far outpacing the Americas. ^[39]
• Management credits new markets in Asia and Europe with quadrupling international revenue over the past few years, and sees further expansion ahead. ^[40]

If you believe that Lululemon can eventually crack the code on U.S. product cycles again, the global footprint looks like under‑exploited optionality rather than a consolation prize.

3. A Once‑in‑a‑Decade Valuation for a High‑Quality Brand

Multiple commentators—across Nasdaq, Motley Fool, various valuation sites and now investors like Michael Burry—have framed the current setup as a “once‑in‑a‑lifetime” or “once‑in‑a‑decade” buying opportunity, precisely because Lululemon is trading at: ^[41]

• ~12–13x next year’s earnings, versus 30–60x in the glory years.
• A fraction of its historical price‑to‑sales and price‑to‑cash‑flow multiples.

The bull logic is simple: if the brand remains structurally strong, and if current headwinds are cyclical (macro, tariffs, product missteps) rather than fatal, today’s price could eventually look absurdly low.

The Bear Case: Brand Fatigue, Governance and Structural Margin Risk

Bears aren’t arguing that Lululemon goes bankrupt. They’re arguing that it deserves to trade like a typical, slower‑growth apparel company—not a premium secular growth story.

Key points on the bearish side:

1. The Brand Isn’t Untouchable Anymore

TipRanks and several recent long‑form articles argue that Lululemon has lost some of its cultural monopoly on “premium athleisure”: ^[42]

• Down‑market competitors (Costco’s Kirkland, Amazon basics, Target, Shein) offer “good enough” leggings and hoodies at a fraction of the price.
• Up‑market rivals (Alo Yoga, Vuori, On Running) have stolen some of the aspirational halo among younger consumers.
• Multiple recent pieces from the Wall Street Journal and others describe Lululemon as having an “identity crisis,” with founder Chip Wilson loudly criticizing current leadership and product choices. ^[43]

When the core brand cools, expansion into categories like NFL fan gear is helpful, but not necessarily thesis‑saving.

2. U.S. Weakness Is Not Just Macro

Q2 numbers and management commentary show that Americas comps are negative, even as peers and discounters manage better trends. ^[44]

Bears argue that this isn’t just about inflation or high interest rates; it’s also about:

• Product cycles that stayed too static for too long.
• Overreliance on staple styles that competitors have learned to mimic.
• A consumer base that may be saturated with $120 yoga pants and $130 hoodies. ^[45]

3. Tariffs Could Permanently Compress Margins

The tariff hit isn’t trivial. Lululemon itself estimated about $240 million in 2025 gross profit headwind from higher import duties and de minimis changes, and up to $320 million in 2026 under current assumptions. ^[46]

Yes, management is pursuing mitigation—vendor savings, pricing, supply chain tweaks—but there’s a risk that:

• LULU has to absorb at least part of the tariff impact.
• Raising prices further could accelerate trading down to cheaper substitutes.

Put simply: some of that 60%‑ish gross margin magic may never fully come back.

4. Governance and Leadership Overhang

Between:

• High‑profile departures (Sun Choe, Celeste Burgoyne). ^[47]
• Founder criticism. ^[48]
• Public debates over strategy and brand positioning.

Bears argue there’s too much execution risk to assign a premium multiple, especially when insiders and some big institutions have been net sellers recently. ^[49]

What to Watch in the December 11 Q3 2025 Earnings

The upcoming Q3 report is less about the quarter itself and more about the trajectory. A few numbers and themes will matter disproportionately:

1. U.S. Performance and Product “Newness”
   • Do Americas comps remain negative, or is there any sign of stabilization?
   • Are markdowns moderating, suggesting better product‑market fit? ^[50]
2. International Momentum
   • Can international revenue keep growing at high‑teens or 20%+ rates, or is that also starting to slow? ^[51]
3. Updated 2025 Guidance
   • With just one quarter left in the fiscal year, does management hold, cut, or (long shot) raise its $10.85–11.0 billion revenue and $12.77–12.97 EPS ranges? ^[52]
4. Tariff Mitigation Details
   • Any more specificity on supplier shifts, pricing actions, or long‑term gross margin targets will be crucial. ^[53]
5. Leadership Narrative
   • How clearly does management explain the new commercial structure under André Maestrini, and how directly do they address investor concerns about brand direction and governance? ^[54]
6. Capital Allocation
   • The company has already been active on share buybacks—Q2 alone saw 1.1 million shares repurchased for about $278 million—and AInvest notes a $1 billion program expansion. Investors will listen closely for updated buyback intentions at this lower share price. ^[55]

The more Lululemon can point to concrete progress on U.S. trends and margin resilience, the more plausible the bull thesis becomes. The more the call sounds like “just wait a few more quarters,” the more emboldened the bears will be.

Bottom Line: A Classic Battleground Stock at a Very Un‑Classic LULU Multiple

Lululemon today is an odd beast:

• A high‑margin, globally recognized brand with strong cash generation and an ambitious international strategy. ^[56]
• A stock down more than 50% in 2025, trading at barely a third of its historical valuation multiples. ^[57]
• A company facing real strategic and execution challenges—from tariffs and U.S. weakness to product fatigue and governance drama. ^[58]

Analysts, hedge funds, social‑media traders and even famous contrarians like Michael Burry are far from unanimous. But they all agree on one thing: LULU is no longer a “set‑and‑forget” growth stock.

For long‑term investors, the decision now revolves around a simple but non‑trivial question:

Is Lululemon’s current slump a cyclical reset for a still‑dominant premium brand, or the start of a more ordinary, lower‑growth, lower‑multiple future?

The answer probably won’t be fully clear on December 11—but the Q3 report and guidance will be the next big data point in a year that has turned Lululemon from a momentum favorite into one of the market’s most closely watched turnaround stories.

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