Lululemon Q4 Earnings Preview: Low Expectations, Seasonal Momentum in Focus

Lululemon is scheduled to report its fiscal Q4 results on Thursday after the market close, and this print could go a long way in determining sentiment for the softlines retail group heading into spring. While Wall Street doesn’t expect surprises for the quarter itself—thanks to the January guidance raise—investors will be laser-focused on the company’s fiscal 2025 outlook, the health of the U.S. business, and signs of traction around Lululemon’s product innovation efforts.

Consensus estimates are calling for Q4 EPS of $5.85 on $3.58 billion in revenue, both at the high end of the updated company guidance range. In January, Lululemon raised its top-line forecast from $3.475–$3.51 billion to $3.56–$3.58 billion and lifted its EPS guide to $5.81–$5.85 from $5.56–$5.64. The revision reflected strong holiday sales and margin upside, suggesting LULU’s core products continued to resonate with consumers during peak retail season.

But with much of Q4 in the books, the real test is forward-looking. Analysts expect full-year FY25 EPS of $15.37 on $11.3 billion in revenue. Bulls want to see whether Lululemon can deliver “prudent but beatable” guidance—something TD Cowen’s John Kernan thinks is likely. A low bar could leave room for outperformance, especially if product innovation and digital engagement help the company reverse recent soft U.S. trends.

Several analysts have flagged seasonal newness and brand momentum as pivotal in determining Q1 trends. Needham’s Tom Nikic believes early spring demand has picked up meaningfully, validating management’s strategy of refreshing assortments to reignite North American sales. If so, a strong handoff from holiday into spring would bode well for the health of LULU’s core business. Truist’s tracking data adds to the optimism: TikTok engagement, Google Trends, and card spend data suggest accelerating momentum, particularly when compared to peers like Abercrombie and Zara.

However, not everyone is convinced. Jefferies, who maintains an Underperform rating with a $220 price target, warns that merchandise issues and stale assortments could lead to LULU’s first annual decline in U.S. sales (ex-COVID). Their field work suggests that areas outside the core—like the new Glow Up line—are still a work in progress. Though Glow Up reviews are decent, it lacks scale relative to hits like the Align series. Jefferies also sees risks in Canada and questions whether China’s growth alone can offset North American weakness.

From a performance standpoint, Lululemon stock has underwhelmed investors. Shares are down 12% year-to-date and nearly 23% off February highs, significantly underperforming the S&P 500. The stock now trades at ~22x forward earnings, a substantial discount to its five-year average of 36.7x. On an EV/Sales basis, LULU is down to 3.8x from prior multiples above 6x. That valuation compression reflects both macro headwinds and a growing consensus that U.S. growth is stalling while competitors like Alo, Vuori, and even Nike’s new Skims partnership gain share.

Still, the setup going into earnings isn’t all bad. Sentiment is neutral at best, expectations have reset lower, and over 60% of Wall Street analysts still rate LULU a Buy or Strong Buy. If guidance shows resilience, especially on gross margins and digital traction, the stock could rebound on even modest beats. As Truist notes, a reacceleration of U.S. momentum—supported by improving TikTok traction and store traffic—could drive a valuation re-rating.

Ultimately, Lululemon’s Q4 results may not move the stock much on their own. But commentary around Q1 trends, merchandising innovation, and international performance will offer clues about whether LULU’s brand power can reignite growth in an increasingly competitive and cautious apparel landscape.