lululemon athletica inc. (NASDAQ: LULU) is closing out the week of Dec. 20, 2025 with a rare combination of catalysts that can move a stock fast: a CEO exit and succession search, better-than-expected quarterly results, an expanded buyback authorization, and a reported $1+ billion activist stake from Elliott Investment Management.
The headlines helped reignite trading interest in LULU stock—but they also underscored why the shares have struggled through 2025: slowing momentum in the Americas, margin pressure tied to promotions and costs, and intensifying competition in athleisure. The debate for investors now is whether leadership change plus activist involvement can accelerate a “back-to-basics” reset quickly enough to stabilize the core U.S. business—while international growth continues to carry results.
As of the last close on Friday, Dec. 19, LULU stock finished at $209.45. [1]
What’s driving LULU stock right now
Several developments are shaping sentiment around lululemon stock as of Dec. 20:
- CEO Calvin McDonald is scheduled to step down on Jan. 31, 2026, with lululemon launching a search for a new CEO. [2]
- Activist investor Elliott Investment Management reportedly built a stake exceeding $1 billion, with reporting indicating Elliott has been working with retail executive Jane Nielsen as a potential CEO candidate. [3]
- Q3 fiscal 2025 results beat expectations, supported by strong international growth, even as the Americas remained soft. [4]
- The board authorized a $1.0 billion increase to the stock repurchase program, with about $1.6 billion remaining authorized as of Dec. 11. [5]
- The company flagged a meaningful tariff and trade-policy headwind in its outlook, including assumptions about higher tariffs and removal of the U.S. “de minimis” exemption. [6]
Taken together, the news flow has shifted the market narrative from “slowing growth” to “turnaround setup”—but with a clear warning label: management execution and leadership decisions will matter more than ever in the coming quarters.
The CEO transition: what the company has announced
lululemon says Calvin McDonald will step down as CEO and as a board member effective Jan. 31, 2026, and he is expected to remain as a senior advisor through March 31, 2026. [7]
During the transition, the company has outlined interim leadership, including CFO Meghan Frank and Chief Commercial Officer André Maestrini serving as interim co-CEOs while the board searches for a permanent successor. [8]
Reuters also reported that lululemon’s board is focused on a leader with growth and transformation experience, and that investors initially cheered the shake-up amid hopes of a reset in the brand’s U.S. business. [9]
Founder Chip Wilson’s criticism raises the temperature
Founder Dennis J. “Chip” Wilson has added public pressure at a sensitive moment.
In a Dec. 12 statement filed on the SEC site, Wilson criticized lululemon’s board and succession planning, argued the brand needs revitalization, and urged a CEO search led by new independent directors with deep expertise. He also pointed to what he characterized as major shareholder value destruction in recent years. [10]
This matters for LULU stock because founder involvement can complicate governance and timelines—especially when an activist investor is also building influence.
Elliott’s reported $1B+ stake: why investors are paying attention
The other major force in the LULU stock story is Elliott Investment Management.
Reuters reported that Elliott acquired a stake exceeding $1 billion, becoming one of lululemon’s largest investors, and that Elliott has been working with retail executive Jane Nielsen as a potential CEO successor. [11]
Investopedia added context that Nielsen has turnaround experience and is seen by Elliott as a credible candidate at a time when lululemon is trying to re-accelerate its U.S. business while preserving international momentum. [12]
From a stock-market perspective, activism can be a double-edged sword:
- It can raise confidence that operational changes (product cadence, merchandising discipline, cost focus) will be pushed harder.
- It can also create distraction risk, including the possibility of a prolonged governance fight if stakeholders disagree on CEO selection and strategy. [13]
Q3 fiscal 2025 earnings: the key numbers behind the headlines
lululemon reported Q3 fiscal 2025 results for the quarter ending Nov. 2, 2025. Here are the figures that investors are using to frame the LULU stock outlook:
- Net revenue increased 7% to $2.6 billion. [14]
- Americas net revenue decreased 2%, while international net revenue increased 33%. [15]
- Comparable sales increased 1% overall; Americas comps fell 5%, while international comps rose 18%. [16]
- Gross margin fell 290 basis points to 55.6%, and operating margin fell 350 basis points to 17.0%. [17]
- Diluted EPS was $2.59, down from $2.87 in the year-ago quarter. [18]
One of the clearest messages in the release is that lululemon’s growth engine has become more geographically split: international strength is real, but the Americas (especially the U.S.) must stabilize for the stock to regain its old premium narrative.
Balance sheet and buybacks: a major support lever for LULU stock
A big reason investors continue to watch lululemon stock closely—even after a difficult year—is the company’s financial flexibility.
lululemon reported it ended the quarter with $1.0 billion in cash and cash equivalents, and inventory was $2.0 billion, up 11% year over year (with units up 4%). [19]
On capital returns, lululemon said:
- It repurchased 1.0 million shares during Q3 for $189.0 million. [20]
- The board approved a $1.0 billion increase to the repurchase authorization on Dec. 3. [21]
- Approximately $1.6 billion remained authorized under the buyback program as of Dec. 11. [22]
For many investors, that buyback “capacity” becomes a key stabilizer in periods of uncertainty—especially when the stock is down sharply from prior highs and management believes long-term brand value remains intact.
Guidance: what lululemon expects for Q4 and full-year fiscal 2025
Guidance is where the earnings story becomes more complex—and where many analysts focused their questions.
lululemon’s outlook includes:
Q4 fiscal 2025 guidance
- Net revenue expected $3.500 billion to $3.585 billion (a decline of 3% to 1% reported, but growth of 2% to 4% excluding the prior-year 53rd week)
- Diluted EPS expected $4.66 to $4.76 [23]
Full-year fiscal 2025 guidance
- Net revenue expected $10.962 billion to $11.047 billion (growth of 4% reported, 5% to 6% excluding the prior-year 53rd week)
- Diluted EPS expected $12.92 to $13.02 [24]
The trade-policy risk investors can’t ignore: tariffs and “de minimis”
One of the most market-sensitive disclosures in the earnings materials is how lululemon is modeling trade policy.
The company said its 2025 guidance includes an estimated reduction in income from operations of approximately $210 million, net of mitigation efforts, reflecting assumptions about higher tariffs on imports into the United States and removal of the de minimis exemption. [25]
This is crucial for the LULU stock debate because it ties margins to policy outcomes that may be partly outside management control—meaning valuation can swing quickly as investors reprice risk.
International expansion: lululemon doubles down on growth outside North America
Even as the CEO search begins, lululemon is pushing forward with international expansion.
On Dec. 18, the company announced it plans to expand its international presence in 2026 with six new market entries—a record number in a single year—using a franchise partnership model. The new markets include Greece, Austria, Poland, Hungary, Romania, and India (via a previously announced partnership). [26]
For investors, this reinforces two points:
- International growth is not just “nice to have”—it’s increasingly central to the company’s growth math.
- A franchise model can accelerate entries while potentially reducing capital intensity versus company-owned expansion (though execution and brand control remain key watch items).
Analyst forecasts: price targets, ratings, and what Wall Street expects next
With the stock volatile, investors are watching analyst targets for signals on whether sentiment is truly shifting or merely bouncing.
Consensus view
According to StockAnalysis’ compilation, analysts currently show:
- Consensus rating: “Hold”
- Average 12-month price target: $222.55
- Target range: $175 (low) to $420 (high) [27]
That average target implies modest upside from the latest close—suggesting the Street sees potential, but not enough clarity yet to tilt decisively bullish.
Recent notable target moves (December 2025)
In the wake of earnings and the CEO transition news:
- Truist raised its price target to $200 from $170 and maintained a Hold rating. [28]
- The same report cited target increases by Evercore ISI (to $215), Stifel (to $210), and BofA Securities (to $220), alongside a Jefferies move to Hold with a higher target. [29]
Analyst caution has also been consistent: some believe that even with leadership change, fixing perceived issues like product “staleness” and competitive pressure in the U.S. may take time. [30]
Valuation snapshot: why some see “cheap,” and others see “trap”
Valuation is a central part of the LULU stock conversation, especially after a sharp decline in 2025.
Reuters highlighted that lululemon’s forward valuation multiple sits well below certain peers in athletic apparel, reflecting how much skepticism has been priced in. [31]
Meanwhile, StockAnalysis lists LULU with a market cap around $24–$25 billion and a 52-week range from $159.25 to $423.32, underscoring both the magnitude of the drawdown and the volatility investors are pricing around a potential reset. [32]
What to watch next for lululemon stock
For investors following LULU stock into 2026, the next leg likely depends on a short list of measurable catalysts:
1) CEO selection and governance clarity
A permanent CEO hire could reduce uncertainty—or increase it—depending on the candidate, timeline, and whether activists or large shareholders push competing agendas. [33]
2) The U.S. recovery narrative: product, pace, and promotions
Reuters reported that investors are focused on whether lululemon can win back younger, affluent shoppers and refresh product execution in the U.S., where competition has intensified. [34]
3) International growth durability
Q3 showed international net revenue growth of 33% and strong comparable sales outside the Americas—momentum that can keep overall results afloat even if U.S. demand remains choppy. [35]
4) Tariffs and trade rules
The company has already quantified a large expected impact on operating income based on its current assumptions. Any change in the underlying policy environment—or in lululemon’s mitigation success—could move estimates quickly. [36]
5) Inventory discipline
Inventory rose 11% year over year to $2.0 billion. If demand is strong, that can support sales; if demand softens, it can drive higher discounting and margin pressure—an issue investors have watched closely in apparel retail. [37]
When is lululemon’s next earnings report?
The company has not publicly confirmed the next earnings date in the press releases cited above, but market calendars tracked by Investing.com currently list Mar. 31, 2026 as the next expected earnings release date. [38]
Bottom line for LULU stock on Dec. 20, 2025
lululemon stock is at an inflection point: operationally, the company is showing continued international strength and the financial flexibility to keep buying back shares; strategically, it is entering a leadership transition while an activist investor reportedly pushes for change.
For LULU investors, the central question is no longer whether lululemon is a premium brand—it’s whether the company can restore consistent product momentum and customer excitement in the Americas quickly enough to re-earn a premium multiple, especially with tariffs and trade policy pressuring margins in the background. [39]
References
1. stockanalysis.com, 2. apnews.com, 3. www.reuters.com, 4. corporate.lululemon.com, 5. corporate.lululemon.com, 6. corporate.lululemon.com, 7. apnews.com, 8. apnews.com, 9. www.reuters.com, 10. www.sec.gov, 11. www.reuters.com, 12. www.investopedia.com, 13. www.ft.com, 14. corporate.lululemon.com, 15. corporate.lululemon.com, 16. corporate.lululemon.com, 17. corporate.lululemon.com, 18. corporate.lululemon.com, 19. corporate.lululemon.com, 20. corporate.lululemon.com, 21. corporate.lululemon.com, 22. corporate.lululemon.com, 23. corporate.lululemon.com, 24. corporate.lululemon.com, 25. corporate.lululemon.com, 26. corporate.lululemon.com, 27. stockanalysis.com, 28. www.investing.com, 29. www.investing.com, 30. www.investing.com, 31. www.reuters.com, 32. stockanalysis.com, 33. www.reuters.com, 34. www.reuters.com, 35. corporate.lululemon.com, 36. corporate.lululemon.com, 37. corporate.lululemon.com, 38. www.investing.com, 39. corporate.lululemon.com
