Lululemon Athletica Enters Oversold Territory Amid Market Volatility

lululemon athletica inc (LULU) has entered oversold territory with an RSI reading of 27.2, compared to the S&P 500 ETF's 54.0 reading. The stock's recent heavy selling may be exhausting itself, making it a potential buy opportunity. LULU's low point in its 52-week range is $163.98, with a last trade of $168.50.

Lululemon Athletica Inc. (LULU) has recently entered oversold territory, with its Relative Strength Index (RSI) reading at 27.2, compared to the S&P 500 ETF's 54.0 reading. This indicates that the stock's recent heavy selling may be exhausting itself, presenting a potential buy opportunity for investors. The stock's low point in its 52-week range is $163.98, with a last trade of $168.50 [1].

The company's stock has been under pressure due to various factors, including the recent second-quarter fiscal 2025 results. While the company reported a 7% increase in net revenue to $2.5 billion, the U.S. business underperformed, and gross margin decreased by 110 basis points to 58.5% [2]. The company attributed these results to aspects of product execution and industry-wide challenges, such as higher tariff rates. Despite these challenges, Lululemon's brand and balance sheet remain strong, with $1.2 billion in cash and cash equivalents and a capacity under its committed revolving credit facility of $393.2 million.

Looking ahead, the company expects net revenue to be in the range of $2.470 billion to $2.500 billion for the third quarter of 2025, representing growth of 3% to 4%. Diluted earnings per share are expected to be in the range of $2.18 to $2.23 for the quarter. For the full year 2025, the company now expects net revenue to be in the range of $10.850 billion to $11.000 billion, representing growth of 2% to 4%, or 4% to 6% excluding the 53rd week of 2024. Diluted earnings per share are now expected to be in the range of $12.77 to $12.97 for the year [2].

In conclusion, Lululemon Athletica Inc.'s entry into oversold territory presents a potential buy opportunity for investors, given the stock's recent heavy selling and the company's strong brand and balance sheet. However, investors should closely monitor the company's ability to navigate industry-wide challenges and execute on its growth plans.

References:
[1] https://www.ainvest.com/news/retail-traders-top-5-stock-picks-week-goog-mstr-oklo-lulu-rklb-2509/
[2] https://www.placera.se/pressmeddelanden/lululemon-athletica-lululemon-athletica-inc-announces-second-quarter-fiscal-2025-results-20250904