Lululemon Athletica (LULU) Stock Forecast & Price Target

Lululemon Athletica has shown resilience in maintaining and growing market share within the performance athletic and premium athletic wear segments despite increased competition from brands like Alo and Vuori. The company's strong top-line trends, indicated by healthy double-digit percentage gains expected from new units, expansion efforts, and positive comparisons, point to a robust growth trajectory. Furthermore, the increase in markdown guidance suggests that Lululemon may effectively navigate pricing strategies while enhancing product newness, reinforcing a positive outlook for sustained revenue performance.

Lululemon Athletica has revised its 2025 earnings outlook downward, lowering it from a projection of $14.58-$14.78 to $12.77-$12.97, primarily due to the cessation of the de-minimis exemption, rising tariff rates, and slowing growth in key markets such as North America and China. The company is also facing margin pressures, with expectations of a 250 basis point decline attributed to increased tariffs, markdown pressures, and fixed-cost deleverage impacting the earnings per share (EPS) forecast for fiscal year 2026 to a range of $12.00-$12.50. Market dynamics further indicate a slowdown in the athleisure segment, evidenced by negative comps for Lululemon in North America and a competitive environment that is pressuring consumers to opt for lower-priced alternatives.