Lululemon Stock Drops 2.38% Despite Market Gains, Ranked 4th in Earnings Decline

On July 24, 2025, Lululemon Athletica (LULU) experienced a 2.38% decline in its stock price, closing at $218.69. This drop occurred despite a slight gain in the S&P 500 and a mixed performance in the broader market, with the Dow Jones Industrial Average losing 0.7% and the Nasdaq Composite gaining 0.18%.

Investors are closely watching Lululemon's upcoming earnings report, which is expected to show an earnings per share (EPS) of $2.87, a decrease of 8.89% from the same period last year. Revenue is projected to reach $2.54 billion, a 7.01% increase year-over-year. For the full fiscal year, the consensus estimates predict earnings of $14.47 per share and revenue of $11.19 billion, reflecting changes of -1.16% and +5.64% respectively from the previous year.

Recent changes in analyst estimates for Lululemon reflect evolving short-term business trends. Positive estimate revisions are generally seen as a good sign for the company's outlook. Lululemon's current Zacks Rank is #4 (Sell), indicating a cautious stance from analysts. The company's Forward P/E ratio is 15.48, slightly below the industry average of 15.52, suggesting it is trading at a discount. The PEG ratio, which accounts for projected earnings growth, is 1.9, compared to the industry average of 2.07.

Lululemon's high valuation is juxtaposed with weak U.S. demand, rising costs, and margin pressures. The company's cautious profit outlook for fiscal 2025 adds to the uncertainty. JPMorgan Chase & Co. recently downgraded Lululemon to a "Neutral" rating, reflecting concerns about the company's performance. Additionally, the stock has hit a 52-week low of $219.84, marking a 10.93% decline over the past year.

Evercore ISI has lowered its price target for Lululemon to $265, citing oversold conditions and a 44% decline in the stock over the past six months. The company's innovation pipeline is seen as a potential driver of growth in the second half of 2025, but the stock has lost 41.4% year-to-date, outperforming the industry's decline of 24.2%.