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Is lululemon's Digital Push Winning Over E-Commerce Customers?

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Key Takeaways

  • LULU posts solid digital engagement in Q3, led by app upgrades, loyalty tools and online merchandising gains.
  • E-commerce growth slowed as promotions and markdowns hurt margins, though inventory discipline rose online.
  • LULU's digital tools are boosting omnichannel behavior, lifting conversion, store traffic and customer value.

lululemon athletica inc.’s (LULU - Free Report) third-quarter fiscal 2025 earnings highlight how digital remains a core pillar of its growth strategy, even as the company navigates a more cautious consumer environment. Management emphasized that e-commerce continues to play a critical role in engaging guests, expanding reach and supporting omnichannel momentum, suggesting that lululemon’s digital push is delivering strategic, if uneven, gains.

In the fiscal third quarter, lululemon saw solid digital engagement, supported by improvements across its app, loyalty ecosystem and online merchandising. Management noted that the digital channel remains highly profitable and an important entry point for new customers, particularly younger and international shoppers. Enhancements in product storytelling, personalized marketing and member-led experiences are helping deepen relationships and drive repeat traffic online.

That said, digital growth has moderated compared with the post-pandemic surge, reflecting broader normalization in online shopping and softer demand in North America. Management acknowledged that e-commerce performance has been pressured by higher promotional activity and selective markdowns, which weighed on digital margins. However, improved inventory discipline and better chase capabilities are allowing lululemon to be more responsive online, reducing excess stock and limiting unnecessary discounting.

lululemon continues to view digital and stores as complementary rather than competing channels. The company highlighted strong omnichannel behaviors, with digital tools driving store traffic through buy-online-pickup-in-store, ship-from-store and app-enabled guest engagement. These capabilities are helping lift overall conversion and customer lifetime value, even when pure-play e-commerce growth is modest.

Overall, while lululemon’s digital push may not be delivering explosive top-line growth in the current environment, it is effectively strengthening customer engagement, supporting omnichannel efficiency and reinforcing brand loyalty. As demand stabilizes and international markets scale, digital initiatives appear well-positioned to remain a durable competitive advantage.

Are RL & CROX Matching LULU’s Digital-First Playbook?

With lululemon setting the pace in digital engagement, the spotlight now turns to whether Ralph Lauren Corporation (RL - Free Report) and Crocs Inc. (CROX - Free Report) are keeping up with similar e-commerce and omnichannel strategies.

Ralph Lauren’s second-quarter fiscal 2026 earnings indicate its digital strategy is gaining traction. Management highlighted double-digit growth across its digital ecosystem, driven by full-funnel activations, improved personalization and strong full-price selling. Digital comps rose 15% in North America, while Asia and Europe posted double-digit digital growth. Investments in AI tools, data analytics and social commerce are strengthening engagement and supporting higher-quality online sales.

Crocs’ third-quarter 2025 earnings show that its digital strategy is resonating, even amid tighter promotions. Management highlighted strong social commerce traction, with Crocs remaining the No. 1 footwear brand on TikTok Shop in the United States. Live-streaming initiatives and global TikTok expansion drove customer acquisition and engagement, helping digital marketplaces offset softer North America DTC trends and reinforcing e-commerce as a key growth lever.

The Zacks Rundown for LULU

lululemon’s shares have gained 19.7% in the past three months against the industry’s decline of 0.1%.

 

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Image Source: Zacks Investment Research

 

From a valuation standpoint, LULU trades at a forward 12-month price-to-earnings ratio of 16.31X, lower than the industry’s 16.47X.

 

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Image Source: Zacks Investment Research

 

The Zacks Consensus Estimate for lululemon’s fiscal 2025 and 2026 earnings implies year-over-year declines of 11% and 1.9%, respectively. Earnings estimates for fiscal 2025 have been northbound in the past 30 days, whereas that for fiscal 2026 has been southbound in the same period.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

LULU currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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