lululemon athletica inc. (LULU Quick QuoteLULU - Free Report) gained momentum, with its shares rising 14.5% in the past month. The stock’s momentum led it to outperform the Textile - Apparel industry’s growth of 3.1% and the Consumer Discretionary sector’s 0.6% return in the past month. The stock has also outpaced the S&P 500’s rise of 1.7% in the same period.

The LULU stock’s momentum was particularly notable following the company’s better-than-expected third-quarter fiscal 2025 results, driven by gains in the international business. Additionally, the company’s raised fiscal 2025 outlook boosted investor sentiment on the stock.

LULU’s 1-Month Price Performance

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lululemon’s performance is significantly stronger than that of G-III Apparel Group (GIII Quick QuoteGIII - Free Report) , which rose 3.1% in the past month. The stock also outperformed Guess Inc. (GES Quick QuoteGES - Free Report) and Ralph Lauren Corporation’s (RL Quick QuoteRL - Free Report) declines of 1.8% and 2.1%, respectively, in the past month.

At the current share price of $208.97, lululemon trades 31.2% above its 52-week low of $159.25. Meanwhile, the LULU stock’s price is 50.6% below its 52-week high of $423.32. The stock trades above its 50-day moving average, indicating a bullish near-term sentiment.

LULU Stock Trades Above 50-Day Moving Average

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What’s Bolstering the LULU Stock’s Performance?

lululemon’s stock performance is supported by a combination of resilient execution, strong international momentum and a clearly articulated path to reaccelerate growth in 2026. In the third quarter of fiscal 2025, the company delivered better-than-expected earnings and revenues, reflecting solid demand for innovation-led products and disciplined expense management despite ongoing macro and tariff pressures.

A key pillar bolstering investor confidence is lululemon’s international growth engine, particularly in Mainland China, where revenue growth remained robust and market share continued to expand across city tiers. Strong performance in outerwear, core franchises and digital activations highlights the scalability of the brand outside North America and provides a durable growth runway beyond fiscal 2025.

Another supportive factor is the company’s detailed action plan to influence its U.S. business. Management outlined three clear pillars — product creation, product activation and enterprise efficiency — aimed at refreshing assortments, improving speed to market, and elevating in-store and digital experiences. 

Equally important is the company’s fiscal 2025 outlook. LULU anticipates net revenues of $10.96-$11.05 billion for fiscal 2025 compared with the $10.85-$11 billion stated earlier. The company projects an EPS of $12.92-$13.02, suggesting an increase from the $14.64 reported in fiscal 2024. The revised EPS view marks an increase from the $12.77-$12.97 projected earlier. 

Management expects the most meaningful benefits of its U.S. turnaround plan to materialize in fiscal 2026, driven by higher new-style penetration, faster product development cycles and improved store and digital activation. The company plans to increase newness penetration to about 35% in spring 2026, refresh key franchises and better align assortments with local demand, initiatives aimed at reigniting traffic and improving full-price sell-through.

While management acknowledged that fiscal 2026 margins would face pressure from tariffs and reinvestments, it also emphasized multi-year efficiency efforts, disciplined inventory management and productivity gains to support long-term profitability. Importantly, lululemon enters fiscal 2026 with a debt-free balance sheet, strong cash flow and ample share repurchase capacity, allowing it to invest through near-term headwinds.

Taken together, confidence in fiscal 2026 product-led inflection, sustained international momentum and financial flexibility is reinforcing investor optimism and helping propel lululemon’s stock.

Here’s How Estimates Are Shaping Up for LULU

The Zacks Consensus Estimate for lululemon’s fiscal 2025 EPS has increased 1% in the past 30 days. The upward revision in earnings estimates indicates that analysts are optimistic about the company’s near-term growth potential. Meanwhile, the EPS estimate for fiscal 2026 declined 0.5% in the past seven days. 

For fiscal 2025, the Zacks Consensus Estimate for LULU’s revenues implies 4.5% year-over-year growth, while the EPS estimate suggests an 11% decline. The consensus mark for fiscal 2026 revenues indicates 4.4% year-over-year growth, while the earnings estimate suggests a 1.9% decline.

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LULU’s Valuation Picture

lululemon’s current forward 12-month price-to-earnings (P/E) multiple is 16.31X. This multiple is lower than the industry average of 16.47X and the S&P 500’s average of 23.44X, making the stock appear relatively cheap.

The company is trading at a lower valuation than some of its competitors. Its peer, Ralph Lauren, trades at a higher forward 12-month P/E multiple of 21.81X. However, some peers like G-III Apparel and Guess look relatively cheap. G-III Apparel and Guess have forward 12-month P/E ratios of 9.94X and 9.65X, respectively, significantly lower than that of LULU.

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Are There Headwinds in LULU’s Path?

lululemon faces several headwinds that could temper its growth trajectory. Management highlighted ongoing softness in the North America business, wherein traffic remains pressured amid cautious discretionary spending. Elevated promotional intensity across the apparel space and a slower recovery in core women’s categories are weighing on comparable sales, making near-term demand visibility less certain.

Margin pressures also loom in the path ahead. The company expects fiscal 2026 gross margin headwinds from tariffs, higher input costs and incremental investments to reignite U.S. growth. While productivity initiatives are underway, management acknowledged that benefits will take time to fully materialize, creating an execution-sensitive period as lululemon balances reinvestment with profitability.

Should Investors Buy LULU Stock?

Overall, sentiment around lululemon’s stock remains constructive, supported by solid execution, encouraging international momentum and improving near-term earnings expectations. The recent upward revision in estimates reflects growing confidence in management’s strategy, particularly its ability to stabilize the U.S. business while sustaining growth in the international markets. Investors also appear reassured by the company’s clear roadmap toward a product-led reacceleration and its strong financial position, which provides flexibility to invest despite uncertainty.

However, the stock’s relatively cheap valuation may also be signaling some inbuilt challenges. Ongoing pressure in North America, margin headwinds tied to reinvestments and tariffs, and the need for flawless execution in the planned turnaround could weigh on performance in the interim. While these factors warrant caution, they do not undermine the long-term brand strength and strategic potential. 

Given the balanced mix of positives and risks, holding the stock with a long-term perspective appears prudent for investors willing to ride through near-term volatility. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.