Lululemon Athletica (LULU) AI Stock Analysis

• Market Cap: $21.72B
• Dividend Yield: N/A
• Average Volume (3M): 6.59M
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.88
• Revenue Growth: 9.16%
• EPS Growth: 12.74%
• Country: US
• Employees: 39,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 3.10
• Shares Outstanding: 113,468,080
• 10 Day Avg. Volume: 4,510,148
• 30 Day Avg. Volume: 6,586,764
• PEG Ratio: 1.40
• Price to Book (P/B): 11.74
• Price to Sales (P/S): 4.79
• P/FCF Ratio: 32.06
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 2.18
• Enterprise Value/Gross Profit: 3.68
• Enterprise Value/Ebitda: 7.95
• 1Y Price Target: $198.14
• Price Target Upside: 12.84% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 25

• Rating: 65 Neutral
• Price Target: $180.00 ▲(2.51% Upside)

Lululemon's overall stock score reflects strong financial performance and a low valuation, counterbalanced by bearish technical indicators and challenges highlighted in the earnings call. The company's strategic initiatives and international growth offer potential upside, but near-term pressures in the U.S. market and tariff impacts require careful monitoring.

Positive Factors

International Expansion

Lululemon's expansion in China and other international markets supports long-term growth, diversifying revenue sources beyond the U.S.

Strong Cash Flow

Strong cash flow generation indicates financial health, enabling reinvestment in growth initiatives and shareholder returns.

Product Innovation

Commitment to product innovation enhances competitiveness and aligns with evolving consumer preferences, supporting long-term demand.

Negative Factors

U.S. Revenue Decline

Declining U.S. revenue poses a risk to overall growth, highlighting challenges in its largest market that could impact future performance.

Tariff Impacts

Increased tariffs and regulatory changes pressure margins, necessitating strategic adjustments to sustain profitability.

Inventory Levels

Rising inventory levels may lead to increased markdowns and margin pressure, affecting financial performance if not managed effectively.

Lululemon Athletica Business Overview & Revenue Model

Company Description

Lululemon Athletica (LULU) is a leading athletic apparel company specializing in high-quality yoga, running, and workout clothing for both men and women. Founded in 1998 in Vancouver, Canada, the company has expanded its product offerings to include a range of accessories and lifestyle apparel. Lululemon’s commitment to quality, innovation, and community engagement has positioned it as a premium brand in the athleisure market, appealing to a health-conscious consumer base seeking both performance and style.

How the Company Makes Money

Lululemon generates revenue primarily through the sale of its apparel and accessories, both in physical retail stores and online. The company operates a direct-to-consumer (DTC) model that allows it to maintain higher margins compared to traditional wholesale distribution. Key revenue streams include sales from its flagship stores, e-commerce platform, and outlet locations. Furthermore, Lululemon benefits from a loyal customer base and a strong brand identity, which drive repeat purchases. The company also engages in community-building initiatives, such as local fitness events and partnerships with yoga instructors and gyms, which enhance brand loyalty and customer engagement. Additionally, Lululemon has expanded its product lines and introduced collaborations, such as special collections, that help diversify its offerings and attract new customers.

Lululemon Athletica Financial Statement Overview

Summary

Lululemon Athletica exhibits strong financial performance with robust profitability and efficient operations. The company maintains a solid balance sheet with prudent leverage and high returns on equity. However, the decline in free cash flow growth warrants monitoring.

Income Statement

Lululemon Athletica demonstrates strong financial performance with consistent revenue growth and solid profitability margins. The TTM data shows a Gross Profit Margin of 59.10% and a Net Profit Margin of 16.38%, indicating efficient cost management and profitability. The Revenue Growth Rate of 1.43% in the TTM suggests steady growth, although slightly slower compared to previous periods. Overall, the company maintains robust EBIT and EBITDA margins, reflecting operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable Debt-to-Equity Ratio of 0.40 in the TTM, indicating prudent leverage. The Return on Equity (ROE) is impressive at 42.05%, showcasing effective utilization of shareholder funds to generate profits. The Equity Ratio stands at 58.29%, suggesting a strong equity base relative to total assets, which enhances financial stability.

Cash Flow

Cash flow analysis reveals a mixed picture. While the Operating Cash Flow to Net Income Ratio is healthy at 1.23, indicating strong cash generation relative to net income, the Free Cash Flow Growth Rate shows a decline of 11.20% in the TTM. This suggests potential challenges in maintaining free cash flow levels, although the Free Cash Flow to Net Income Ratio remains solid at 0.61, indicating reasonable cash flow coverage of earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.90B	10.59B	9.62B	8.11B	6.26B	4.40B
Gross Profit	6.44B	6.27B	5.61B	4.49B	3.61B	2.46B
EBITDA	2.99B	2.95B	2.59B	2.02B	1.60B	1.04B
Net Income	1.79B	1.81B	1.55B	854.80M	975.32M	588.91M
Balance Sheet
Total Assets	7.52B	7.60B	7.09B	5.61B	4.94B	4.19B
Cash, Cash Equivalents and Short-Term Investments	1.16B	1.98B	2.24B	1.15B	1.26B	1.15B
Total Debt	1.76B	1.58B	1.40B	1.07B	881.05M	798.68M
Total Liabilities	3.14B	3.28B	2.86B	2.46B	2.20B	1.63B
Stockholders Equity	4.39B	4.32B	4.23B	3.15B	2.74B	2.56B
Cash Flow
Free Cash Flow	1.17B	1.58B	1.64B	327.81M	994.61M	574.11M
Operating Cash Flow	1.91B	2.27B	2.30B	966.46M	1.39B	803.34M
Investing Cash Flow	-851.51M	-798.17M	-654.13M	-569.94M	-427.89M	-695.53M
Financing Cash Flow	-1.48B	-1.65B	-548.83M	-467.49M	-844.99M	-80.79M

Lululemon Athletica Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 175.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LULU, the sentiment is Negative. The current price of 175.59 is above the 20-day moving average (MA) of 170.56, below the 50-day MA of 187.99, and below the 200-day MA of 283.29, indicating a neutral trend. The MACD of -3.46 indicates Negative momentum. The RSI at 45.48 is Neutral, neither overbought nor oversold. The STOCH value of 66.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LULU.

Lululemon Athletica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
URBN	79 Outperform	$6.53B	14.26	19.72%	―	9.63%	56.06%
ONON	76 Outperform	$13.75B	90.19	9.66%	―	39.16%	-14.16%
ROST	75 Outperform	$49.64B	24.24	37.98%	1.04%	1.92%	1.50%
GAP	68 Neutral	$8.01B	9.28	28.07%	2.92%	-0.05%	15.17%
AEO	66 Neutral	$2.87B	16.31	12.17%	2.95%	-2.73%	-16.71%
LULU	65 Neutral	$21.72B	12.02	42.42%	―	9.16%	12.74%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Lululemon Athletica Corporate Events

Lululemon Elects Directors and Ratifies Auditor

At Lululemon Athletica‘s 2025 Annual Meeting of Shareholders on June 11, 2025, several key decisions were made. Three Class III directors were elected, PricewaterhouseCoopers LLP was ratified as the independent public accounting firm for the fiscal year ending February 1, 2026, and executive compensation was approved. However, a shareholder proposal regarding a report on discrimination risks related to charitable partnerships was not approved.