Lululemon (LULU) Stock Update – December 7, 2025: Tariffs, Earnings Reset and 2026 Forecasts Explained

Lululemon Athletica’s stock (NASDAQ: LULU) has had a brutal 2025, but the story isn’t dead – it’s just much messier than the old “unstoppable growth darling” narrative.

As of the latest close, LULU trades around $190 per share, up roughly 3.5% on Friday, December 5, and valuing the company at a little over $22.5 billion. The shares sit more than 55% below their 52‑week high near $423, but still above the recent low around $159. ^[1]

With third‑quarter fiscal 2025 earnings due on December 11, investors are trying to decide whether Lululemon stock is a deep‑value opportunity in disguise or just a broken growth story with a comfy hoodie. ^[2]

This article walks through the latest LULU stock news, analyst forecasts, and key debates as of December 7, 2025, to help you understand what’s actually going on. This is information, not personal investment advice.

1. Where LULU Stock Stands Right Now

From a pure numbers point of view, Lululemon looks very different from the premium multiple rocket ship it used to be.

• Price: about $190 per share at the December 5 close, with a one‑day gain of a little over 3%. ^[3]
• 52‑week range: roughly $159 to $423 – so the stock is down about 55% from its high but has bounced from the lows. ^[4]
• Market cap: around $22.5 billion. ^[5]
• Valuation:
  • Trailing P/E around 13x, using earnings per share near $14.6. ^[6]
  • Forward P/E (based on 2025 EPS forecasts) around 14x. ^[7]
• Profitability: recent quarter showed net margin ~16% and return on equity above 40%, still elite by apparel‑retail standards. ^[8]
• Ownership: institutional investors control about 85% of the float; insiders hold roughly 0.5%. ^[9]

On December 6, MarketBeat reported that Baird Financial Group more than doubled its LULU position in Q2, buying about 74,000 shares and bringing its stake to roughly 135,000 shares, or 0.11% of the company, worth just over $32 million at the time. Large holders like Vanguard, T. Rowe, AllianceBernstein, Geode, and Invesco also added shares earlier in the year. ^[10]

So: the crowd that manages pension funds and endowments hasn’t abandoned Lululemon. But Wall Street’s enthusiasm has definitely cooled.

2. How 2025 Broke the “Flawless Growth” Story

For most of the past decade, you could summarise the LULU thesis in one line: “premium brand, double‑digit growth, fat margins.” In 2025, all three pillars got rattled.

Q1 2025: Guidance Cut and a 22% Face‑Plant

In early June, after reporting first‑quarter results, Lululemon slashed its full‑year earnings guidance and the stock promptly fell about 22% in pre‑market trading. ^[11]

Key points from that episode:

• The company cited higher tariff‑related costs and weaker store traffic in the Americas, blaming economic uncertainty, inflation and pressure on discretionary spending. ^[12]
• Comparable sales were up just 1%, weighed down by a 2% decline in the Americas, a stark change from the double‑digit growth of prior years. ^[13]
• Management cut EPS guidance to roughly $14.6–$14.8 (from about $15.0–$15.2 previously) on revenue still expected around $11.15–$11.30 billion. ^[14]

The CFO told analysts that the company would use “modest” price increases on a small set of products to help offset the tariff hit. ^[15]

Q2 2025: Another Reset – This Time a Big One

The second quarter (reported in early September) looked better on the surface but worse in guidance: ^[16]

• Revenue: about $2.53 billion, up 6.5% year over year.
• EPS:$3.10, slightly below last year’s $3.15, but above analyst estimates around $2.86.
• Profitability: ROE just over 42%, net margin about 16%. ^[17]

The real problem was guidance. Management trimmed full‑year 2025 expectations again, telling investors to expect: ^[18]

• Revenue:$10.85–$11.0 billion, implying only 2–4% growth versus 2024.
• EPS: about $12.77–$12.97, which would be a decline from 2024’s roughly $14.64. ^[19]
• Gross margin: projected to fall by roughly 300 basis points year over year. ^[20]

In other words, the market went from expecting double‑digit growth and expanding margins to low‑single‑digit sales growth and shrinking margins in a matter of months.

The Long‑Term Plan Looks… Ambitious Now

Back in 2022, Lululemon rolled out its “Power of Three ×2” growth plan, targeting: ^[21]

• Doubling 2021 revenue of $6.25 billion to $12.5 billion by 2026.
• Doubling menswear and digital revenue.
• Quadrupling international revenue versus 2021.

Analyst forecasts now project revenue of around $11.19 billion for 2025 and $11.68 billion for 2026, implying growth of roughly 5.7% and 4.4% respectively – solid, but nowhere near the blitz that would cleanly hit $12.5 billion by 2026. ^[22]

That doesn’t make the plan impossible, but it certainly makes it a stretch.

3. Tariffs and the Margin Squeeze

One of the least glamorous but most important parts of the LULU story in 2025 is trade policy.

A recent Zacks/Nasdaq preview noted that: ^[23]

• Lululemon’s manufacturing spread across Asia makes it one of the apparel names most exposed to new tariffs and the removal of the U.S. de minimis exemption for small imports.
• Tariffs and de‑minimis changes are expected to cut operating profit by about $240 million in fiscal 2025, and $320 million in 2026, even after mitigation efforts.

That pressure shows up in the guidance:

• Full‑year EPS expected to fall ~10% in 2025 vs 2024, despite revenue still growing. ^[24]
• Management is trying to take selective price increases and tweak sourcing, but there’s a limit to how much you can raise prices on leggings before customers revolt. ^[25]

Combine that with more promotional activity in U.S. apparel retail and you get a healthy business whose economics are simply less magical than they used to be.

4. Q3 2025 Earnings Preview: December 11 Will Be Pivotal

Lululemon will report third‑quarter fiscal 2025 results on Thursday, December 11, 2025, after the bell (4:30 p.m. ET). ^[26]

Pre‑earnings commentary from Zacks and Nasdaq highlights a familiar pattern: ^[27]

• Revenue: consensus expects low single‑digit growth (around 3–4% year over year).
• Earnings: forecast to decline vs the prior year, thanks to tariffs and margin pressure.
• Expectations are already low, which means the stock’s reaction will hinge on surprises in guidance and commentary more than on the headline EPS number.

MarketChameleon’s historical data shows that: ^[28]

• LULU has tended to see an average pre‑earnings “run‑up” of about 2.7%.
• Last time it reported (September 4), the stock dropped about 18.6% in a single day, closing near $167.80.
• At around $183–$190 today, it’s roughly 9% above that post‑earnings low.

What Investors Are Watching on the Call

Based on recent previews and commentary, the big questions for December 11 are: ^[29]

• U.S. demand: Are North American comps stabilizing, or still weakening?
• International growth: Is strength in Europe and Asia enough to offset U.S. softness?
• Gross margin trajectory: How much of the tariff hit is being passed through via price increases?
• Inventory and promotions: Is Lululemon holding the line on its premium positioning, or leaning harder into discounting?
• Updated guidance: Does management stick with the current 2025 outlook, cut again, or offer first hints about 2026?

Given how violently the stock has reacted to guidance cuts this year, the tone of management’s comments may matter as much as the numbers themselves.

5. Analyst Ratings and LULU Stock Forecasts

Wall Street is… deeply undecided.

Consensus View: “Hold,” With Modest Upside

According to MarketBeat: ^[30]

• 36 analysts have rated LULU over the last 12 months.
• The consensus rating is “Hold.”
• Breakdown:
  • 3 Sell
  • 30 Hold
  • 2 Buy
  • 1 Strong Buy
• The average 12‑month price target is about $221, implying roughly 16% upside from around $190.
• Targets range from $120 on the low end to a sky‑high $500 at the bullish extreme.

StockAnalysis, using a slightly different set of analysts, also shows a “Hold” consensus and an average target around $228.77, implying about 20% upside. Their target range runs from $120 to $420. ^[31]

So the Street collectively thinks LULU stock is somewhat undervalued, but not in a “back up the truck” way – and there’s huge dispersion.

Key Recent Analyst Moves

Recent rating and target changes illustrate the divide: ^[32]

• BTIG – Janine Stichter (Strong Buy, $303 target):
  Reiterated a $303 price target in late November, implying around 60% upside. She argues that pessimism has gone too far given Lululemon’s brand strength and international growth, and her bullish note helped send the stock up nearly 5% on November 25. ^[33]
• UBS – Jay Sole (Hold, $183 target):
  Trimmed his target to $183 in November and maintained a Hold, essentially saying the stock is now fairly valued near current levels. ^[34]
• Goldman Sachs – Brooke Roach (Hold, $180 target):
  Cut her target from $200 to $180, staying neutral and signaling limited near‑term upside. ^[35]
• Jefferies – Randal Konik (Underperform‑style view, $120 target):
  A pronounced bear, with a $120 target that implies downside of roughly one‑third from current prices. ^[36]
• Baird – $195 target, Neutral rating:
  Baird downgraded the stock earlier in the fall and cut its target to $195 – almost exactly where the shares are now – then later disclosed it had doubled its stake in Q2. ^[37]

If you like investing in situations where smart people violently disagree, LULU definitely qualifies.

6. What the Pros Are Saying: Bull vs Bear Case in Late 2025

You can see the contours of the debate in recent Motley Fool, Nasdaq, and other commentary.

The Bull Case

Bullish analysts and commentators generally argue: ^[38]

• Brand power is intact. Lululemon is still the default premium athleisure brand; it dominates the “Align legging plus belt bag” corner of the universe.
• International and men’s growth remain strong. While U.S. growth has slowed, international markets and menswear continue to expand faster than the overall business.
• Profitability is still high. A 16% net margin and 40%+ ROE are excellent in retail, even after tariff headwinds.
• Valuation is now reasonable. Sub‑15× forward earnings is cheap relative to the company’s historical multiples and its remaining growth potential.
• Wall Street is too gloomy. Sentiment is so sour that even modestly better‑than‑feared results could drive a multi‑year re‑rating.

One Motley Fool piece framed the question as whether to buy Lululemon stock before 2026, noting that revenue grew just 6.5% in the most recent quarter vs ~20%+ in earlier years, but arguing that the long‑term athleisure trend and brand equity could still justify a rebound if execution improves. ^[39]

The Bear Case

Skeptics focus on a different cluster of facts: ^[40]

• Growth has slowed dramatically. Revenue growth has dropped to mid‑single digits, a far cry from the 20–30% pace investors used to pay up for.
• Margins are being structurally squeezed by tariffs, promotional competition, and higher costs.
• U.S. demand looks fragile. Traffic in the Americas has slipped, and the company has resorted to more discounting just to keep volumes moving.
• Execution risk is rising. Recent analysis has flagged inconsistent product assortments and a need to rebuild “product discipline” to avoid misfires that dilute the brand. ^[41]
• The long‑term 2026 targets may no longer be realistic. Current consensus revenue and EPS forecasts suggest Lululemon will fall short of its “double 2021 revenue by 2026” ambition. ^[42]

Several commentators in the last 48 hours have essentially landed on: “LULU might recover, but you need a long time horizon and a strong stomach for volatility.” ^[43]

7. Fundamental Outlook: What the Numbers Say About 2025–2026

Consensus forecasts compiled by StockAnalysis and other aggregators give a reasonable snapshot of what “the market” is now expecting: ^[44]

Revenue

• 2024 (actual): about $10.59 billion in revenue.
• 2025 (forecast): around $11.19 billion, up 5.7%.
• 2026 (forecast): around $11.68 billion, up 4.4%.

That’s a slowing but still positive growth profile – Lululemon is expected to keep growing, just not at its old rocket speed.

Earnings

• 2024 EPS (actual): about $14.64.
• 2025 EPS (forecast): about $13.20, a ~10% decline.
• 2026 EPS (forecast): about $13.00, a further 1–2% decline. ^[45]

So analysts are modeling a two‑year earnings air pocket, mostly driven by margin compression rather than collapsing demand.

At roughly $190 per share, that means: ^[46]

• Forward P/E ~14x on 2025 EPS.
• Price‑to‑sales ~2x 2025 revenue.

You can frame that either as:

• Cheap for a premium brand with international growth and high returns on capital, or
• Still too expensive if tariffs, competition and slower growth turn out to be the “new normal.”

Both readings are logically coherent; which one you favour depends on your assumptions about the next 3–5 years.

8. Consumer Demand Check: Cyber Monday and the Brand Signal

While Wall Street has been arguing about multiples, shoppers have been doing what they do best: buying leggings on sale.

Consumer outlets like People and Good Housekeeping have been loudly promoting Lululemon’s Cyber Monday 2025 event, highlighting: ^[47]

• Discounts of up to 60% on core products like Align and Wunder Train leggings, Everywhere Belt Bags and winter outerwear.
• Entry prices starting around $9 for smaller accessories.
• Popular sizes and colours selling out quickly.

That says at least two useful things:

1. The brand is still highly desirable. People don’t scramble for discounts on dead brands.
2. Promotions are real. To clear inventory and stimulate demand in a choppy macro environment, even premium players are leaning more into sales.

For investors, the question is whether discounted hoodie mania is tactical (short‑term promotion in a rough year) or structural (a sign that full‑price demand is weakening).

9. Key Risks and Catalysts for LULU Stock into 2026

Pulling the threads together, here are the major factors that could move LULU stock over the next 12–18 months: ^[48]

1. Tariff policy and cost inflation

• If tariff pressures ease or the company successfully diversifies its supply chain, the earnings hit forecast for 2025–2026 could prove too pessimistic.
• If tariffs worsen or mitigation fails, EPS may undershoot already reduced expectations.

2. U.S. demand and promotional intensity

• A stabilization in Americas comps, even at modest growth, would support the bull case.
• Continued weakness, especially if it forces deeper discounting, would reinforce the bear case that Lululemon’s pricing power is eroding.

3. International growth and store expansion

• LULU is still opening stores and growing in Europe and Asia. Momentum here is crucial to offset any structural slowdown in North America.

4. Product execution

• Motley Fool’s “3 things Lululemon must fix” piece zeroed in on product discipline – making sure assortments stay tight, on‑brand, and not over‑extended. Missteps here hit both sales and brand equity. ^[49]

5. Progress (or lack of it) toward the 2026 revenue goal

• The closer we get to 2026 without a credible path to $12.5 billion in revenue, the more investors may write off the “Power of Three ×2” plan as aspirational marketing rather than a roadmap. ^[50]

6. Sentiment and positioning

• With institutional ownership above 85% and a wall of “Hold” ratings, it won’t take much to swing opinion. A couple of better‑than‑feared quarters could trigger upgrades and fresh inflows; another nasty guidance cut could do the opposite. ^[51]

10. Bottom Line: A Reset, Not a Ruin

Here’s the compressed version of the Lululemon stock narrative as of December 7, 2025:

• The business is still profitable and growing, but more slowly and with thinner margins than before.
• The stock has already been punished, dropping more than 50% from its highs as investors digested guidance cuts and tariff headwinds. ^[52]
• Analysts are split: consensus says “Hold” with mid‑teens upside, but targets range from “this is broken” at $120 to “this is a bargain” above $300. ^[53]
• The next major catalyst is Q3 earnings on December 11, where commentary on 2025–2026 margins and U.S. demand could easily push the stock sharply in either direction. ^[54]

For long‑term, risk‑tolerant investors who still believe in the global athleisure trend and Lululemon’s brand, LULU now looks like a high‑quality company priced as if its best days are behind it.

For more cautious investors, it may simply be a case study in what happens when growth expectations and reality diverge, best watched from a safe distance until the earnings dust settles.

References

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