We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
LULU Q3 EPS Preview: Are Shares Stretched to the Downside Enough?
Key Takeaways
LULU will report Q3 EPS on December 11th.
Shares are down ~50% YTD.
Challenges include tariffs, rising competition, and slowing demand.
Lululemon Company Overview
Founded in 1998 and based in Vancouver, Canada, Lululemon Athletica Inc. ((LULU - Free Report) ) is a yoga-inspired athletic apparel company that designs, manufactures, and distributes athletic apparel and accessories for women, men, and children. The company offers a wide variety of fitness pants, shorts, tops, and jackets designed for athletic pursuits, such as yoga training, and running. Lululemon sells its products primarily through brick-and-mortar retail stores, which are fixtures in most North American malls. However, the company is expanding through e-commerce, license and supply agreements, and retail locations worldwide.
LULU Q3 EPS Preview
As Lululemon’s earnings report approaches, here’s what you need to know:
· When: LULU will report EPS on Thursday, December 11th, after the market closes.
· Wall Street Expectations: Analyst expectations are low for Lulu. Zacks Consensus Analyst Estimates expect sales growth of 3.72% and negative year-over-year EPS growth.
Image Source: Zacks Investment Research
· Expected Move: The options market is currently pricing in a move of +/- 13% following its Q3 EPS announcement.
After being a top-tier market performer over the past decade, LULU shares have finally suffered a significant correction. Year-to-date, LULU shares are down 50%, underperforming the market and its peers by a wide margin. Below are LULU’s three biggest challenges:
1. Tariff Hit: With manufacturing operations across Asia, LULU is among the companies most affected by tariffs. Tariffs and the removal of the de minimis exemption are squeezing LULU’s margins, driving a $240 million hit in fiscal 2025 and a $320 million drag in fiscal 2026, despite mitigation efforts.
2. Competition Intensifies: Imitation is the sincerest form of flattery. However, in Lulu’s case, it’s impacting earnings. Several new, digitally native brands such as Alo Yoga, Rhone, and Vuori are challenging Lulu’s brand. Meanwhile, established lifestyle brands like Nike ((NKE - Free Report) ) are improving their “athleisure” offerings.
3. North America Business Slows: Although Lulu is expanding internationally, its largest business, North America, is contracting. Lulu customers are skittish amid higher interest rates and inflation fears.
Unfortunately, these headwinds are unlikely to subside any time soon. However, the real question for Q3 EPS will be, “With the stock down 50% YTD, is the bad news already priced in?”
Bottom Line
Lululemon’s upcoming EPS report arrives at a critical moment. Once a premium growth standout, the retailer now sits in the middle of margin pressure, fierce competition, and slowing demand. With expectations already low and a stock that has corrected dramatically, the next EPS reaction may hinge on whether its poor results are priced in.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
LULU Q3 EPS Preview: Are Shares Stretched to the Downside Enough?
Key Takeaways
Lululemon Company Overview
Founded in 1998 and based in Vancouver, Canada, Lululemon Athletica Inc. ((LULU - Free Report) ) is a yoga-inspired athletic apparel company that designs, manufactures, and distributes athletic apparel and accessories for women, men, and children. The company offers a wide variety of fitness pants, shorts, tops, and jackets designed for athletic pursuits, such as yoga training, and running. Lululemon sells its products primarily through brick-and-mortar retail stores, which are fixtures in most North American malls. However, the company is expanding through e-commerce, license and supply agreements, and retail locations worldwide.
LULU Q3 EPS Preview
As Lululemon’s earnings report approaches, here’s what you need to know:
· When: LULU will report EPS on Thursday, December 11th, after the market closes.
· Wall Street Expectations: Analyst expectations are low for Lulu. Zacks Consensus Analyst Estimates expect sales growth of 3.72% and negative year-over-year EPS growth.
Image Source: Zacks Investment Research
· Expected Move: The options market is currently pricing in a move of +/- 13% following its Q3 EPS announcement.
After being a top-tier market performer over the past decade, LULU shares have finally suffered a significant correction. Year-to-date, LULU shares are down 50%, underperforming the market and its peers by a wide margin. Below are LULU’s three biggest challenges:
1. Tariff Hit: With manufacturing operations across Asia, LULU is among the companies most affected by tariffs. Tariffs and the removal of the de minimis exemption are squeezing LULU’s margins, driving a $240 million hit in fiscal 2025 and a $320 million drag in fiscal 2026, despite mitigation efforts.
2. Competition Intensifies: Imitation is the sincerest form of flattery. However, in Lulu’s case, it’s impacting earnings. Several new, digitally native brands such as Alo Yoga, Rhone, and Vuori are challenging Lulu’s brand. Meanwhile, established lifestyle brands like Nike ((NKE - Free Report) ) are improving their “athleisure” offerings.
3. North America Business Slows: Although Lulu is expanding internationally, its largest business, North America, is contracting. Lulu customers are skittish amid higher interest rates and inflation fears.
Unfortunately, these headwinds are unlikely to subside any time soon. However, the real question for Q3 EPS will be, “With the stock down 50% YTD, is the bad news already priced in?”
Bottom Line
Lululemon’s upcoming EPS report arrives at a critical moment. Once a premium growth standout, the retailer now sits in the middle of margin pressure, fierce competition, and slowing demand. With expectations already low and a stock that has corrected dramatically, the next EPS reaction may hinge on whether its poor results are priced in.