Lululemon Tops Estimates As Q4 Growth Cools, Analysts Say

Lululemon Athletica Inc (NASDAQ:LULU) shares rallied on Friday, after the company on Thursday reported upbeat third-quarter earnings.

• Lululemon Athletica shares are climbing with conviction. What’s behind LULU gains?

Here are some key analyst takeaways:

• BofA Securities analyst Lorraine Hutchinson maintained a Neutral rating, while raising the price target from $185 to $220.
• Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating, while lifting the price target from $200 to $215.
• BTIG analyst Janine Stichter reaffirmed a Buy rating and price target of $303.

Check out other analyst stock ratings.

BofA Securities: Lululemon Athletica reported higher-than-expected earnings of $2.59 per share, Hutchinson said in a note. She added, however, that the estimates for 2025 remain unchanged as the beat is offset by higher spending in the fourth quarter to drive traffic.

The company's sales during the Thanksgiving week cleared excess inventory, the analyst stated. "Sales have slowed since, causing a slightly lower 4Q revenue plan, incremental markdowns and higher SG&A to drive traffic," she further wrote.

Telsey Advisory Group: Lululemon Athletica reported earnings of $2.59 per share, topping consensus of $2.21 per share, while total sales grew 7.1% to $2.566 billion, ahead of consensus of $2.479 billion, Telsey said. She added, however, that expectations had been revised significantly lower after the company's disappointing guidance in early September.

Management raised their 2025 sales guidance to $10.962-$11.047 billion, from their prior projection of $10.850-$11 billion, and earning to $12.92-$13.02 per share, up from $12.77-$12.97 per share, the analyst stated. Trends have slowed since the Thanksgiving weekend and Lululemon Athletica's "U.S. business also remains soft, with management looking to an inflection next year," she further wrote.

BTIG: Lululemon Athletica reported an earnings beat on slightly better-than-expected revenue, which was led by China, Stichter said. Revenues from Mainland China grew 47% in constant currency terms, accelerating from 24% in the second quarter, "although management acknowledged some benefit from timing shifts," she added.

As expected, revenues in the Americas decelerated from the 1% growth recorded in the second quarter, the analyst stated. "While the company saw improved trends over Black Friday, they did see some moderation in the post-Black Friday period, which has been taken to account in the guide," she further wrote.

LULU Price Action: Shares of Lululemon Athletica had jumped by 10.25% to $206.17 at the time of publication on Friday.

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• Dow Rises Over 100 Points; Lululemon Posts Upbeat Q3 Earnings

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