Published: December 8, 2025
Key points
- Lululemon shares have lost more than half their value in 2025, trading around $190 – roughly 55% below their 52‑week high of $423.32, despite a recent rebound. [1]
- Q3 fiscal 2025 earnings are due on December 11, with Wall Street expecting revenue growth of about 3–4% but a year‑over‑year earnings drop of roughly 23%. [2]
- Tariffs and a weakening U.S. business are pressuring margins, even as international sales grow double‑digits and the company leans into a global expansion strategy. [3]
- Valuation has compressed to “value stock” territory, with Lululemon trading at about 13× trailing earnings and analysts mostly rating the stock a “Hold” with modest upside. [4]
- Fresh analysis on December 8, 2025 shows a sharply divided market: some see a beaten‑down value play with long‑term brand strength, while others warn of “dead money” into earnings and flag technical downside risks. [5]
Where Lululemon stock stands on December 8, 2025
Lululemon Athletica Inc. (NASDAQ: LULU) heads into its Q3 fiscal 2025 earnings week trying to stage a comeback from one of its worst years as a public company.
- The stock closed at $190.01 on Friday, December 5, up 3.49% on the day and about 14–15% over the past month. [6]
- Pre‑market quotes early on December 8 indicate a small move higher around $191. [7]
- Over the last 12 months, shares have traded in a 52‑week range of $159.25–$423.32. At current levels, LULU sits roughly 55% below its peak, and several commentators note the stock is down more than 50% in 2025 alone. [8]
On fundamentals, the company still looks profitable and cash‑generative:
- TTM revenue: about $10.9 billion
- TTM net income: around $1.8 billion
- TTM EPS: roughly $14.72
- Market cap: about $22.5 billion
- Trailing P/E: ~12.9×; forward P/E: ~15.9× [9]
These are not growth‑stock multiples. For a brand that used to command 30–40× earnings, this compression is exactly why much of today’s coverage frames Lululemon as a potential value stock rather than a pure growth name. [10]
Today’s headlines: value chatter, big investors, and a split tape
As of December 8, 2025, fresh coverage around Lululemon centers on three themes: value vs. value trap, smart‑money flows, and pre‑earnings caution.
1. “Is Lululemon quietly becoming a value stock?”
A new piece from The Motley Fool argues that the valuation “reset” has pushed Lululemon into territory rarely seen for the brand:
- The article points out that gross margins remain close to 58–59%, even after tariff headwinds, and highlights the company’s continued profitability and high returns on capital. [11]
- It notes that Lululemon’s P/E ratio near the low teens and price‑to‑book around 5× now sit well below historical norms and many peers. [12]
The takeaway from this camp: if Lululemon can fix its U.S. product issues and navigate tariffs, today’s multiple could look cheap in hindsight.
2. Amundi trims its stake—but institutions still dominate
A fresh MarketBeat report on December 8 reveals that asset manager Amundi cut its LULU stake by about 31.6% in Q2 2025, selling nearly 198,000 shares. The fund now holds 428,140 shares—roughly 0.36% of the company, valued at about $105.5 million. [13]
The same filing‑based piece notes:
- Lululemon beat EPS expectations last quarter, posting $3.10 vs. a consensus around $2.86. [14]
- The P/E multiple of about 13× and a 52‑week high of $423.32 emphasize how far sentiment has swung from the stock’s January highs. [15]
- Roughly 85% of shares are held by institutions, underscoring how central professional sentiment is to LULU’s trading. [16]
Amundi’s move is a reminder that some big holders are de‑risking, even as others are quietly accumulating.
3. Michael Burry steps in on the long side
In a widely discussed late‑November note, Michael Burry (of “The Big Short” fame) disclosed that he owns and likes Lululemon as one of four stock picks he views as multi‑year value ideas. [17]
Burry highlights:
- LULU shares are down roughly 52% year to date, yet trade under 15× projected earnings. [18]
- He categorizes Lululemon as a 3–5 year holding, consistent with his focus on deeply out‑of‑favor stocks whose fundamentals he believes remain intact. [19]
For investors, that’s a powerful signal that at least some high‑conviction value specialists see the drawdown as overdone.
4. Pre‑earnings caution: “Stock to sell” and “dead money”
There is, however, a very different narrative gaining traction ahead of Thursday’s Q3 print:
- An Investing.com column released within the last day names Lululemon the “stock to sell” this week, arguing that despite a roughly 14% one‑month rebound, longer‑term technicals remain bearish or neutral. The piece points to shrinking margins, pricing pressure, and recent downgrades (including Jefferies’ Underperform rating and a $120 price target) as reasons to stay cautious. [20]
- A Seeking Alpha article titled “Lululemon athletica: Dead Money Ahead Of Q3 Earnings” downgrades the stock to Hold, calling shares near the mid‑$180s “fairly valued” given slowing revenue growth, failed product launches, and soft discretionary demand. [21]
This camp sees a risk that, even if Q3 beats expectations on the headline numbers, sentiment and guidance could cap near‑term upside.
5. “Should you buy Lululemon stock before 2026?”
Another new round of articles from The Motley Fool and Nasdaq‑syndicated outlets ask whether the battered stock is now a bargain for 2026:
- They acknowledge that Lululemon has been “slammed by macroeconomic headwinds” and a meaningful slowdown in growth, particularly in North America. [22]
- But they also note that revenue is still growing, the balance sheet remains clean, and high‑margin international markets—especially China—are expanding rapidly. [23]
The conclusion here is more nuanced: LULU may no longer be a momentum stock, but it could still be a solid long‑term compounder if management executes the reset.
Fundamentals: slowing U.S. business, strong international engine, and tariff drag
Q2 2025 results: a tale of two geographies
Lululemon’s most recent reported quarter (Q2 fiscal 2025, ended August 3) explains much of the market’s anxiety. [24]
From the company’s own release:
- Net revenue rose 7% year over year to $2.5 billion (+6% on a constant‑currency basis).
- Comparable sales increased just 1% overall.
- Americas net revenue grew 1%, but Americas comparable sales fell 4%.
- International net revenue jumped 22%, with international comparable sales up 15%.
- Gross margin slipped 110 basis points to 58.5%, while operating margin fell 210 basis points to 20.7%.
- Diluted EPS was $3.10, slightly down from $3.15 a year earlier, but ahead of analyst expectations. [25]
CEO Calvin McDonald described management as “disappointed” with U.S. results and aspects of product execution, while reiterating confidence in the long‑term opportunity. [26]
A detailed Retail Dive analysis sharpened the picture:
- The U.S. business is losing some share in athleisure as shoppers shift spend and sample alternative brands like Alo Yoga and Vuori, which show high customer overlap with Lululemon.
- McDonald admitted the brand had “become too predictable” in casual offerings, with stale lounge and social categories that make up about 40% of the assortment.
- Lululemon plans to increase “new styles” from roughly 23% to 35% of the assortment by next spring, speeding up its design cycle and leaning on a refreshed creative team. [27]
In other words: international expansion is working, but the core U.S. engine needs a tune‑up.
Tariffs: the $240 million hit
Q2 also formalized the company’s tariff headache. In its updated 2025 outlook, Lululemon warned that:
- Full‑year 2025 gross profit will be reduced by about $240 million, net of mitigation efforts like vendor savings and selective price increases.
- Management estimates this tariff impact at roughly 220 basis points of margin, far above a prior assumption of about 40 basis points, following higher U.S. tariff rates and the end of the de minimis exemption on small imports. [28]
Some value‑oriented analyses also point out that higher tariffs could cut roughly 280 basis points from 2026 gross margins if conditions persist, and that revised revenue targets for 2026 (around $11.1 billion vs. an earlier $12.5 billion goal) hint at a structurally slower growth path. [29]
Strategy and leadership: cost cuts, layoffs, and a new commercial structure
To respond to slower U.S. growth and tariff pressure, Lululemon has begun reshaping its organization.
Corporate layoffs and cost discipline
In June 2025, the company announced it would cut about 150 corporate roles, mostly at store support centers, as part of an organizational restructuring. [30]
The cuts:
- Are intended to streamline decision‑making and reduce overhead.
- Come on top of inventory and product resets, particularly in underperforming lounge and social segments. [31]
Combined with slower revenue growth and tariff headwinds, this underpins the more cautious EPS outlook for 2025, now in the $12.77–$12.97 range versus prior guidance closer to $15. [32]
Leadership changes: consolidating global control
On November 20, Lululemon announced a significant leadership reshuffle: [33]
- Celeste Burgoyne, President of the Americas and Global Guest Innovation, will leave at the end of December 2025 after nearly two decades with the company.
- André Maestrini, previously EVP of International, has been promoted to President and Chief Commercial Officer, taking integrated control of all regions, stores, and digital channels worldwide.
- Maestrini is credited with more than quadrupling international revenues since joining in 2021, and will now drive global commercial strategy, including North America. [34]
The restructuring signals a more centralized, globally oriented commercial model—consistent with the reality that Lululemon’s growth engine now sits outside the U.S.
What Wall Street is forecasting now
Q3 2025 expectations
Lululemon is scheduled to report Q3 fiscal 2025 results on Thursday, December 11, 2025, after the market close, followed by a 4:30 p.m. ET conference call. [35]
The Zacks/Nasdaq earnings preview summarizes the current consensus: [36]
- EPS: about $2.22, implying a 22.7% year‑over‑year decline vs. $2.87 in Q3 2024. [37]
- Revenue: around $2.49 billion, up 3.7% from the prior‑year quarter.
- The consensus EPS estimate has been revised slightly downward over the last month, and the Earnings ESP is negative, meaning models do not strongly point to a positive surprise.
- LULU currently carries a Zacks Rank of 3 (Hold).
From the company’s own guidance issued with Q2 results:
- Management expects Q3 revenue of $2.47–$2.50 billion (3–4% growth) and EPS of $2.18–$2.23—broadly in line with Zacks’ consensus. [38]
12‑month price targets: modest upside, wide disagreement
Across major aggregators, the message is consistent: analysts are neutral with modest upside, but price targets span a wide band.
- MarketBeat:
- Consensus rating: Hold
- Average price target:$221.22, implying about 16% upside from ~$190.
- Target range: $120–$500. [39]
- StockAnalysis:
- Around 28 analysts, average target $228.77, or about 20% upside, with a consensus rating of Hold. [40]
- Zacks:
- Short‑term target average around $185.88, with a $120–$250 range. [41]
- Investing.com:
- Consensus rating “Neutral”, with an average 12‑month target near $190, and high/low estimates of $303 and $120 respectively. [42]
Individual broker calls illustrate just how split the Street is:
- BTIG reiterates a Buy with a $303 target—almost 60% above current levels—arguing that the sell‑off has been overdone relative to the brand’s global potential. [43]
- UBS recently lowered its target to $183 and kept a neutral stance, citing weak U.S. sales momentum and projecting a roughly 4.5% revenue decline in that region. [44]
- Jefferies maintains an Underperform with a $120 target, effectively pricing in a prolonged slowdown and continued margin pressure. [45]
For investors, the message is clear: there is no consensus on the right multiple or growth trajectory.
Quant and technical models: short‑term strength, mixed signals
Algorithmic and technical services are also weighing in:
- Intellectia’s AI‑driven model labels LULU a “Strong Buy candidate” in the short term, citing a rising trend since late November and multiple bullish momentum indicators—though it also notes elevated short‑selling and overbought oscillators. [46]
- Moving averages (5‑, 20‑, 60‑day) mostly lean bullish, but the 200‑day trend remains down, consistent with a stock that has bounced but is still in a longer‑term downtrend. [47]
Even the quant models are effectively saying: short‑term uptrend, long‑term damage not fully repaired.
What to watch on December 11: the big questions for Q3
Going into Thursday’s earnings call, markets are likely to focus less on the quarter’s precise EPS and more on what management says about 2025–2026. Key questions include:
- Has U.S. demand stabilized?
- Investors will want signs that the product reset—more newness, faster design cycles, better color and style choices—is starting to show up in comps or traffic, not just in management commentary. [48]
- How high is the “new normal” tariff drag?
- Any updated estimates beyond the $240 million gross‑profit hit for 2025, and early thoughts on 2026 margin structure, will heavily influence how much multiple expansion the stock can realistically earn. [49]
- Can international growth offset North America for several years?
- With China and other international markets posting 20–30% growth, investors will look for evidence that this can continue even as the U.S. slows, and how Maestrini’s new global role may accelerate that shift. [50]
- Is the balance sheet still a key strength?
- Lululemon ended Q2 with about $1.2 billion in cash, no major debt issues, and ongoing share repurchases. How aggressively management continues buybacks at current valuations will be a key signal of internal conviction. [51]
- How aligned is guidance with Street expectations now?
- After multiple guidance cuts and a brutal share‑price reaction in 2025, any further downward revisions could reinforce the “value trap” narrative. Conversely, stable or slightly raised guidance could validate the “negativity is priced in” thesis. [52]
Is Lululemon stock a buy, sell, or hold here?
From the mosaic of December 8 coverage, three broad perspectives emerge:
- Bullish/value view:
Lululemon is a premium global brand with high historical returns on capital, robust international growth, and a strong balance sheet. At ~13× trailing earnings and far below its highs, the stock looks cheap relative to its history and peers—especially for investors with a multi‑year horizon willing to ride through U.S. volatility and tariff noise. [53] - Bearish/value‑trap view:
The U.S. business may be structurally weaker than investors assumed, competition in athleisure is intensifying, and tariffs could permanently compress margins. Multiple cuts to guidance have eroded trust, and several analysts argue that, at current levels, upside is limited until the company proves it can reignite growth at home. [54] - Neutral/“show‑me” view (where most analysts sit):
The stock is not obviously cheap or expensive given new growth and margin realities. With consensus ratings clustering around Hold and price targets pointing to mid‑teens to low‑20% upside, many see LULU as a “wait for more data” story, with Q3 and 2026 guidance likely to reset expectations again. [55]
For individual investors, the decision ultimately comes down to three questions:
- Do you believe Lululemon can repair its U.S. product and regain some share in a more competitive athleisure market?
- Do you think management can offset tariff pressure through pricing, sourcing, and cost discipline without hurting volumes or brand equity?
- Are you comfortable with a volatile, sentiment‑driven name where consensus is neutral but opinions range from deep‑value opportunity to outright underperform?
What is clear from today’s news flow is that Lululemon is no longer priced as a flawless growth story. For the first time in years, the debate is about whether this still‑profitable, still‑iconic brand deserves to sit in the value bucket—and whether that makes LULU a buy, a hold, or a stock to avoid into Thursday’s earnings.
References
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