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lululemon Outlines Strong Holiday Season & Updates Q4 Guidance
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Key Takeaways
LULU expects Q4 FY25 revenues and EPS at the high end of guidance after solid holiday traffic and execution.
Management sees no Q4 FY25 margin or expense changes as global growth offsets North America pressure.
lululemon leverages innovation, omnichannel and the Power of Three X2 plan for long-term expansion.
lululemon athletica inc. (LULU - Free Report) struck a more confident tone at the end of the fourth quarter of fiscal 2025, citing strong holiday demand that is tracking results toward the high-end of its prior guidance. The update reassured investors after a challenging year for the stock, which has been pressured by slowing U.S. demand, leadership changes and heightened competitive intensity in the athleisure space.
Management now expects fourth-quarter fiscal 2025 net revenues and EPS to be at the upper end of the previously guided range of $3.5-$3.59 billion and $4.66-$4.76, respectively. Solid holiday traffic, resilient demand from core customers and disciplined execution supported performance in the key selling season, helping offset broader macro uncertainty and promotional pressures across apparel retail.
The upbeat outlook follows a solid fiscal third quarter, when lululemon reported EPS of $2.59 on $2.57 billion in revenues. However, results paint a mixed picture across regions. U.S. revenues declined 3%, while international sales surged 33%, highlighting the company’s growing reliance on overseas markets to offset softness in its core North American business. Management emphasized that there are no changes to gross margin, SG&A, or the effective tax rate for the fiscal fourth quarter.
Shares of lululemon rose 2.5% yesterday, following the updated fiscal fourth-quarter outlook. The Zacks Rank #3 (Hold) stock rallied 23.6% in the past three months compared with the industry’s growth of 5.8%.
LULU Stock's Share Performance
Image Source: Zacks Investment Research
What’s More
lululemon is currently led by interim co-CEOs Meghan Frank and Andre Maestrini following the departure of former CEO Calvin McDonald, while also facing governance-related noise tied to founder Chip Wilson and activist investor Elliott Management. These factors, combined with intensifying competition from both established and emerging brands, have weighed on investor sentiment.
Management plans to engage directly with investors and analysts at the ICR Conference from Jan. 12 to Jan. 14, 2026. Meghan Frank underscored the company’s focus on executing its action plan to improve the U.S. business and capitalize on emerging opportunities. For now, the market will be watching closely to see if the holiday-quarter strength can translate into broader recovery for the core North American operations.
LULU Positioned for Long-Term Success
lululemon continues to make strong progress with its Power of Three X2 growth strategy, which focuses on product innovation, guest experience and market expansion. The company is leveraging these initiatives to expand internationally, enhance its digital platform and grow key categories such as men’s apparel, while maintaining strong momentum in its core women’s business. These strategic efforts are helping lululemon build a more diversified and resilient revenue base, with holiday-quarter performance reflecting the effectiveness of the plan.
International markets remain a major growth lever for the company, with robust demand across China and other global regions significantly outpacing North America. lululemon’s disciplined store expansion, localized assortments and brand resonance are driving strong comparable sales and positioning the company for sustained long-term growth outside its home market. Management expects international operations to play an important role in overall revenues, supported by operating leverage and brand-led pricing power.
Innovation and omnichannel investments continue to underpin lululemon’s competitive advantage. The brand’s focus on fabric technology, performance-driven design and experiential retail enhances both digital and in-store engagement, while new product launches drive full-price sell-through and loyalty.
Stocks to Consider
Vince Holding Corp. (VNCE - Free Report) provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, the company flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VNCE’s current fiscal-year sales and earnings implies growth of 2% and 26.3%, respectively, from the year-ago figures. VNCE has delivered a trailing four-quarter earnings surprise of 229.6%, on average.
Under Armour, Inc. (UAA - Free Report) , together with its subsidiaries, engages in developing, marketing and distributing performance apparel, footwear and accessories for men, women and youth. At present, Under Armour sports a Zacks Rank of 1.
The Zacks Consensus Estimate for Under Armour’s current fiscal-year sales and earnings implies a decline of 4.5% and 87.1%, respectively, from the year-ago figures. UAA has delivered a trailing four-quarter earnings surprise of 44.5%, on average.
Guess?, Inc. (GES - Free Report) designs, markets, distributes and licenses lifestyle collections of apparel and accessories for men, women and children. At present, the company holds a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for GES’ current fiscal-year sales implies growth of 8%, and the same for current fiscal-year earnings implies a decline of 13.8% from the year-ago figures. GES has delivered a trailing four-quarter earnings surprise of 45%, on average.
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lululemon Outlines Strong Holiday Season & Updates Q4 Guidance
Key Takeaways
lululemon athletica inc. (LULU - Free Report) struck a more confident tone at the end of the fourth quarter of fiscal 2025, citing strong holiday demand that is tracking results toward the high-end of its prior guidance. The update reassured investors after a challenging year for the stock, which has been pressured by slowing U.S. demand, leadership changes and heightened competitive intensity in the athleisure space.
Management now expects fourth-quarter fiscal 2025 net revenues and EPS to be at the upper end of the previously guided range of $3.5-$3.59 billion and $4.66-$4.76, respectively. Solid holiday traffic, resilient demand from core customers and disciplined execution supported performance in the key selling season, helping offset broader macro uncertainty and promotional pressures across apparel retail.
The upbeat outlook follows a solid fiscal third quarter, when lululemon reported EPS of $2.59 on $2.57 billion in revenues. However, results paint a mixed picture across regions. U.S. revenues declined 3%, while international sales surged 33%, highlighting the company’s growing reliance on overseas markets to offset softness in its core North American business. Management emphasized that there are no changes to gross margin, SG&A, or the effective tax rate for the fiscal fourth quarter.
Shares of lululemon rose 2.5% yesterday, following the updated fiscal fourth-quarter outlook. The Zacks Rank #3 (Hold) stock rallied 23.6% in the past three months compared with the industry’s growth of 5.8%.
LULU Stock's Share Performance
Image Source: Zacks Investment Research
What’s More
lululemon is currently led by interim co-CEOs Meghan Frank and Andre Maestrini following the departure of former CEO Calvin McDonald, while also facing governance-related noise tied to founder Chip Wilson and activist investor Elliott Management. These factors, combined with intensifying competition from both established and emerging brands, have weighed on investor sentiment.
Management plans to engage directly with investors and analysts at the ICR Conference from Jan. 12 to Jan. 14, 2026. Meghan Frank underscored the company’s focus on executing its action plan to improve the U.S. business and capitalize on emerging opportunities. For now, the market will be watching closely to see if the holiday-quarter strength can translate into broader recovery for the core North American operations.
LULU Positioned for Long-Term Success
lululemon continues to make strong progress with its Power of Three X2 growth strategy, which focuses on product innovation, guest experience and market expansion. The company is leveraging these initiatives to expand internationally, enhance its digital platform and grow key categories such as men’s apparel, while maintaining strong momentum in its core women’s business. These strategic efforts are helping lululemon build a more diversified and resilient revenue base, with holiday-quarter performance reflecting the effectiveness of the plan.
International markets remain a major growth lever for the company, with robust demand across China and other global regions significantly outpacing North America. lululemon’s disciplined store expansion, localized assortments and brand resonance are driving strong comparable sales and positioning the company for sustained long-term growth outside its home market. Management expects international operations to play an important role in overall revenues, supported by operating leverage and brand-led pricing power.
Innovation and omnichannel investments continue to underpin lululemon’s competitive advantage. The brand’s focus on fabric technology, performance-driven design and experiential retail enhances both digital and in-store engagement, while new product launches drive full-price sell-through and loyalty.
Stocks to Consider
Vince Holding Corp. (VNCE - Free Report) provides luxury apparel and accessories in the United States and internationally. It operates through Vince Wholesale and Vince Direct-to-Consumer segments. At present, the company flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VNCE’s current fiscal-year sales and earnings implies growth of 2% and 26.3%, respectively, from the year-ago figures. VNCE has delivered a trailing four-quarter earnings surprise of 229.6%, on average.
Under Armour, Inc. (UAA - Free Report) , together with its subsidiaries, engages in developing, marketing and distributing performance apparel, footwear and accessories for men, women and youth. At present, Under Armour sports a Zacks Rank of 1.
The Zacks Consensus Estimate for Under Armour’s current fiscal-year sales and earnings implies a decline of 4.5% and 87.1%, respectively, from the year-ago figures. UAA has delivered a trailing four-quarter earnings surprise of 44.5%, on average.
Guess?, Inc. (GES - Free Report) designs, markets, distributes and licenses lifestyle collections of apparel and accessories for men, women and children. At present, the company holds a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for GES’ current fiscal-year sales implies growth of 8%, and the same for current fiscal-year earnings implies a decline of 13.8% from the year-ago figures. GES has delivered a trailing four-quarter earnings surprise of 45%, on average.