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Shares of lululemon athletica inc. (LULU - Free Report) have lost momentum in recent months, pushing it below industry thresholds and portraying a bearish sentiment from a technical standpoint. As a result, the LULU stock slipped below its 50-day simple moving average (SMA) on Oct. 29, 2025. Notably, the stock closed at $170.30 on Oct. 29, 2025, moving below the 50-day SMA of $178.55.
A drop below the 50-day SMA typically signals weakness, suggesting a shift from short-term bullish to bearish sentiment. It highlights fading investor confidence and slower buying interest, especially after months of underperformance.
Additionally, the yoga apparel behemoth moved below its 50-day SMA on June 6, 2025, and continues to trade below the mark since then, indicating a long-term downward trend.
SMA is an essential tool in technical analysis that helps investors evaluate price trends by smoothing out short-term fluctuations. This approach also provides a clearer perspective on a stock's long-term direction.
LULU Stock Trades Below 50 & 200-Day SMAs
Image Source: Zacks Investment Research
lululemon has shown a lackluster performance, with its shares losing 56.1% in the year-to-date period compared with the Zacks Textile – Apparel industry’s decline of 18.1%. The LULU stock has also underperformed the broader Zacks Consumer Discretionary sector’s fall of 2.7% and the S&P 500's growth of 18.5% in the same period.
LULU’s performance is notably weaker than that of its competitor, NIKE Inc. (NKE - Free Report) , which has declined 14.3% year to date. The lululemon stock has also underperformed Gildan Activewear (GIL - Free Report) and Ralph Lauren Corporation’s (RL - Free Report) growth of 25.1% and 39.8%, respectively, in the same period.
LULU’s YTD Price Performance
Image Source: Zacks Investment Research
At its current price of $168.02, the LULU stock trades 1.1% above its 52-week low mark of $159.25 and 60.3% below its 52-week high mark of $423.32.
Rationale Behind LULU’s Dismal Performance
lululemon’s recent share price decline reflects investor concern about the softening fundamentals in its key U.S. market and a tempered outlook for fiscal 2025. Although the company posted an earnings beat for second-quarter fiscal 2025, revenues missed expectations, and management cut its full-year guidance.
Management acknowledged that the U.S. business, lululemon’s largest segment, has underperformed, pressured by sluggish demand for its casual and lounge collections and slower traffic trends through the quarter. The company’s once-reliable franchises, such as Scuba, Softstreme and Dance Studio, have grown stale amid intensifying competition and a more selective consumer backdrop.
The company also faces significant external headwinds, notably the new U.S. trade environment. The company pointed out that increased tariffs and the removal of the de minimis exemption will cut roughly 220 basis points (bps) from the gross margin this year, about $240 million in lost profitability. These tariff pressures, coupled with elevated markdowns to clear seasonal inventory, are expected to drive a 390-bps decline in operating margin for fiscal 2025 and an EPS drop to $12.77-$12.97 from the $14.64 reported in fiscal 2024.
Due to the expectations of increased tariff-related costs, retaliatory tariff measures and the removal of the de minimis exemption, LULU anticipates net revenues of $10.85-$11 billion for fiscal 2025, indicating 2-4% year-over-year growth. Excluding the 53rd week in fiscal 2024, revenues are expected to rise 4-6%. North America revenues are projected to be flat to down 1%, reinforcing investor worries about near-term growth visibility.
For the third quarter of fiscal 2025, management anticipates net revenues of $2.47-$2.5 billion, indicating 3-4% year-over-year growth. EPS for the fiscal third quarter is expected to be $2.18-$2.23, compared with $2.87 in the year-ago period.
Beyond macro costs, lululemon is in a reset phase, rebalancing its merchandise mix and accelerating innovation. Management plans to lift the share of new styles from 23% to 35% by spring 2026 and enhance agility in product development and supply-chain speed. While its international business, especially China and Rest of World, remains strong, the execution gap in the United States and mounting margin pressures underpin the recent decline in LULU’s stock.
Here’s How Estimates Are Shaping Up for LULU
The Zacks Consensus Estimate for lululemon’s fiscal 2025 and 2026 EPS moved down 0.8% and 1.3%, respectively, in the last 30 days. The downward revision in earnings estimates indicates that analysts are skeptical about the company’s near-term growth potential.
For fiscal 2025, the Zacks Consensus Estimate for LULU’s revenues implies 3.7% year-over-year growth, while the EPS estimate suggests an 11.8% decline. The consensus mark for fiscal 2026 revenues and earnings indicates 5.1% and 1.1% year-over-year growth, respectively.
Image Source: Zacks Investment Research
LULU’s Valuation Picture
LULU’s current forward 12-month price-to-earnings (P/E) multiple is 12.92X. This multiple is lower than the industry average of 16.13X and the S&P 500’s average of 24.03X, making the stock appear relatively cheap.
At 12.92X P/E, the company is trading at a much lower valuation than its competitors. Its peers, such as NIKE, Gildan Activewear and Ralph Lauren, are delivering solid growth and trade at more reasonable multiples. NIKE, Gildan Activewear and Ralph Lauren have forward 12-month P/E ratios of 32.51X, 15.66X and 20.45X — all significantly lower than LULU. While LULU’s valuation seems attractive at this level, the cheap valuation may be an indication of underlying weakness due to the soft near-term outlook.
Image Source: Zacks Investment Research
Should Investors Buy, Hold, or Fold LULU Stock?
lululemon’s technical setup underscores persistent weakness, with the stock slipping below both its 50-day and 200-day simple moving averages, a bearish signal suggesting fading momentum in both near and long terms. This deterioration, coupled with the company’s sharp underperformance versus peers and negative estimate revisions, reflects eroding investor confidence and cautious sentiment about its growth outlook.
Although LULU’s valuation appears inexpensive at first glance, trading well below industry and market averages, the low multiple likely signals underlying weakness rather than a genuine value opportunity. The combination of soft U.S. sales, margin pressures from tariffs and muted earnings guidance points to limited catalysts for a turnaround in the near future.
Until lululemon demonstrates tangible improvement in fundamentals, product traction and margin recovery, investors may be better off staying on the sidelines and avoiding this Zacks Rank #5 (Strong Sell) stock’s current downtrend.
Image: Bigstock
lululemon Dips Below 50-Day SMA: Buy Now or Stay on the Sidelines?
Key Takeaways
Shares of lululemon athletica inc. (LULU - Free Report) have lost momentum in recent months, pushing it below industry thresholds and portraying a bearish sentiment from a technical standpoint. As a result, the LULU stock slipped below its 50-day simple moving average (SMA) on Oct. 29, 2025. Notably, the stock closed at $170.30 on Oct. 29, 2025, moving below the 50-day SMA of $178.55.
A drop below the 50-day SMA typically signals weakness, suggesting a shift from short-term bullish to bearish sentiment. It highlights fading investor confidence and slower buying interest, especially after months of underperformance.
Additionally, the yoga apparel behemoth moved below its 50-day SMA on June 6, 2025, and continues to trade below the mark since then, indicating a long-term downward trend.
SMA is an essential tool in technical analysis that helps investors evaluate price trends by smoothing out short-term fluctuations. This approach also provides a clearer perspective on a stock's long-term direction.
LULU Stock Trades Below 50 & 200-Day SMAs
Image Source: Zacks Investment Research
lululemon has shown a lackluster performance, with its shares losing 56.1% in the year-to-date period compared with the Zacks Textile – Apparel industry’s decline of 18.1%. The LULU stock has also underperformed the broader Zacks Consumer Discretionary sector’s fall of 2.7% and the S&P 500's growth of 18.5% in the same period.
LULU’s performance is notably weaker than that of its competitor, NIKE Inc. (NKE - Free Report) , which has declined 14.3% year to date. The lululemon stock has also underperformed Gildan Activewear (GIL - Free Report) and Ralph Lauren Corporation’s (RL - Free Report) growth of 25.1% and 39.8%, respectively, in the same period.
LULU’s YTD Price Performance
Image Source: Zacks Investment Research
At its current price of $168.02, the LULU stock trades 1.1% above its 52-week low mark of $159.25 and 60.3% below its 52-week high mark of $423.32.
Rationale Behind LULU’s Dismal Performance
lululemon’s recent share price decline reflects investor concern about the softening fundamentals in its key U.S. market and a tempered outlook for fiscal 2025. Although the company posted an earnings beat for second-quarter fiscal 2025, revenues missed expectations, and management cut its full-year guidance.
Management acknowledged that the U.S. business, lululemon’s largest segment, has underperformed, pressured by sluggish demand for its casual and lounge collections and slower traffic trends through the quarter. The company’s once-reliable franchises, such as Scuba, Softstreme and Dance Studio, have grown stale amid intensifying competition and a more selective consumer backdrop.
The company also faces significant external headwinds, notably the new U.S. trade environment. The company pointed out that increased tariffs and the removal of the de minimis exemption will cut roughly 220 basis points (bps) from the gross margin this year, about $240 million in lost profitability. These tariff pressures, coupled with elevated markdowns to clear seasonal inventory, are expected to drive a 390-bps decline in operating margin for fiscal 2025 and an EPS drop to $12.77-$12.97 from the $14.64 reported in fiscal 2024.
Due to the expectations of increased tariff-related costs, retaliatory tariff measures and the removal of the de minimis exemption, LULU anticipates net revenues of $10.85-$11 billion for fiscal 2025, indicating 2-4% year-over-year growth. Excluding the 53rd week in fiscal 2024, revenues are expected to rise 4-6%. North America revenues are projected to be flat to down 1%, reinforcing investor worries about near-term growth visibility.
For the third quarter of fiscal 2025, management anticipates net revenues of $2.47-$2.5 billion, indicating 3-4% year-over-year growth. EPS for the fiscal third quarter is expected to be $2.18-$2.23, compared with $2.87 in the year-ago period.
Beyond macro costs, lululemon is in a reset phase, rebalancing its merchandise mix and accelerating innovation. Management plans to lift the share of new styles from 23% to 35% by spring 2026 and enhance agility in product development and supply-chain speed. While its international business, especially China and Rest of World, remains strong, the execution gap in the United States and mounting margin pressures underpin the recent decline in LULU’s stock.
Here’s How Estimates Are Shaping Up for LULU
The Zacks Consensus Estimate for lululemon’s fiscal 2025 and 2026 EPS moved down 0.8% and 1.3%, respectively, in the last 30 days. The downward revision in earnings estimates indicates that analysts are skeptical about the company’s near-term growth potential.
For fiscal 2025, the Zacks Consensus Estimate for LULU’s revenues implies 3.7% year-over-year growth, while the EPS estimate suggests an 11.8% decline. The consensus mark for fiscal 2026 revenues and earnings indicates 5.1% and 1.1% year-over-year growth, respectively.
Image Source: Zacks Investment Research
LULU’s Valuation Picture
LULU’s current forward 12-month price-to-earnings (P/E) multiple is 12.92X. This multiple is lower than the industry average of 16.13X and the S&P 500’s average of 24.03X, making the stock appear relatively cheap.
At 12.92X P/E, the company is trading at a much lower valuation than its competitors. Its peers, such as NIKE, Gildan Activewear and Ralph Lauren, are delivering solid growth and trade at more reasonable multiples. NIKE, Gildan Activewear and Ralph Lauren have forward 12-month P/E ratios of 32.51X, 15.66X and 20.45X — all significantly lower than LULU. While LULU’s valuation seems attractive at this level, the cheap valuation may be an indication of underlying weakness due to the soft near-term outlook.
Image Source: Zacks Investment Research
Should Investors Buy, Hold, or Fold LULU Stock?
lululemon’s technical setup underscores persistent weakness, with the stock slipping below both its 50-day and 200-day simple moving averages, a bearish signal suggesting fading momentum in both near and long terms. This deterioration, coupled with the company’s sharp underperformance versus peers and negative estimate revisions, reflects eroding investor confidence and cautious sentiment about its growth outlook.
Although LULU’s valuation appears inexpensive at first glance, trading well below industry and market averages, the low multiple likely signals underlying weakness rather than a genuine value opportunity. The combination of soft U.S. sales, margin pressures from tariffs and muted earnings guidance points to limited catalysts for a turnaround in the near future.
Until lululemon demonstrates tangible improvement in fundamentals, product traction and margin recovery, investors may be better off staying on the sidelines and avoiding this Zacks Rank #5 (Strong Sell) stock’s current downtrend.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.