LULU earnings outlook | AIME by AInvest

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LULU earnings outlook

6/5/2025 03:08pm

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The deep research logic is organized as follows: 

Okay, let's tackle the user's question about LULU's earnings outlook. First, I need to gather all the relevant data from the provided references. The user is asking for an earnings outlook, so I should focus on the latest estimates, recent earnings reports, and any analyst commentary.

Looking at the references, there's a mix of earnings preview articles, analyst reports, and earnings call transcripts. The latest report period for LULU is 2025Q4, but the user is asking about the earnings outlook, which likely refers to the upcoming 2026Q1 earnings. The estimates for 2026Q1 show an EPS of $2.58 and revenue of $2.36 billion, with a slight YoY increase in EPS and a moderate revenue growth. There's also mention of downward revisions in EPS estimates, indicating some caution from analysts.

The earnings call transcripts from 2025Q4 highlight strong performance, with revenue hitting $3.61 billion and EPS of $6.44. The company is expanding internationally, especially in China, which is a key growth driver. However, there are risks mentioned, such as tariffs and competition. Analysts are concerned about slowing same-store sales growth and the impact of macroeconomic factors like inflation.

The user's profile mentions interest in blue-chip stocks and technical analysis, so I should present the data clearly, maybe using tables for the estimates. Also, since the user is focused on short to medium-term investments, the analysis should highlight near-term risks and opportunities. The target price mentioned is $460, which is a significant upside from the current price of $336.21, so that's a positive point to include.

I need to structure the answer with a conclusion first, then detailed analysis. Make sure to cite all sources properly using the [^Number] format. Also, include the visualization for the LULU Latest Report Period query right after the relevant section. The user might be looking for a balanced view, so I'll present both the growth catalysts and the risks involved.

Conclusion 🎯

Lululemon Athletica (LULU) faces a mixed outlook for its 2026Q1 earnings, with moderate growth expected in revenue and EPS, but tempered by slowing same-store sales and tariff risks. The company’s international expansion, particularly in China, remains a key growth driver, while competition and macroeconomic headwinds pose challenges.

Earnings Outlook Breakdown 📊

1. Key Financial Projections ¹²

Metric	2026Q1 Estimate	YoY Change	Key Notes
EPS	$2.58	+1.6%	Downward revision of 1.1% over the last 30 days due to cautious outlook.
Revenue	$2.36B	+6.7%	Driven by international growth, with China expected to surge 21.7%.
Same-Store Sales	+4.1%	Slowing vs. +6% YoY in 2025Q1	Competition and inflationary pressures are impacting traffic.

2. Growth Catalysts 🚀

China Expansion: China Mainland revenue is projected to grow 21.7% YoY to $369.72M, reflecting Lululemon’s aggressive store openings (+52% YoY in recent quarters). ²³
Digital Channel: E-commerce revenue expected to rise 4.9% YoY to $949.91M, though slower than store growth (+9.2% YoY). ⁴
Product Innovation: Launch of new product lines like Align No Line pants and Daydrift collection has shown strong consumer traction. ⁵⁶

3. Risks & Challenges ⚠️

Tariff Pressures: 40% of Lululemon’s products are sourced from Vietnam and China, exposing it to potential tariff hikes and supply chain disruptions. ⁷⁶
Competition: Rivals like Vuori and Alo Yoga are gaining market share in the U.S., with 90% of Vuori’s stores located near Lululemon’s locations. ⁸
Slowing U.S. Sales: U.S. comparable store sales growth has dropped to 2.43% YoY, raising concerns about domestic market saturation. ⁸⁶

Market Reaction & Analyst Take 📈

Stock Performance: LULU shares have surged 14.2% in the past month, but remain 15.55% down YTD due to macroeconomic concerns. ²⁸
Target Price: Analysts project a $460 price target (21x 2026 EPS), implying 37% upside from the current price of $336.21. ²⁵
Institutional Activity: Recent filings show increased stakes from Rhumbline Advisers (+3.1%) and Whipplewood Advisors (+44,390.9%), signaling institutional confidence. ⁹¹⁰

Final Take 🎯

Lululemon’s 2026Q1 earnings will hinge on its ability to balance international growth with domestic competition and supply chain risks. While the $460 target price suggests upside potential, investors should monitor same-store sales trends and tariff developments closely. For a short to medium-term strategy, LULU could be a high-reward, high-risk play given its premium valuation and growth trajectory.

Final Rating: Hold (Zacks Rank #3) with bullish catalysts in China and product innovation. ²³

Source:

1. LULU Estimate EPS, Estimate Revenue in Fiscal 2026Q1