Lululemon Athletica (LULU) stands at a crossroads. 

Tariff threats have emerged like storm clouds, weighing on many retailers. And in March, a consumer survey revealed that American households are tightening their purse strings, with inflation anxieties dampening sentiment. 

Still, not all is bleak. Lululemon’s latest product innovations have struck a chord with consumers. The company rolled out 18 net new stores, optimized 16 more, and now operates 767 stores globally as of the end of its fourth quarter.

Ambitiously, it plans to grow retail space by 10% in 2025. Come Thursday, June 5, after the closing bell, it is set to announce its Q1 2025 results. With economic and geopolitical tremors shaking the ground, investors should be watching closely to see if Lululemon can stay afloat. 

About Lululemon Stock

Based in Vancouver, Canada, Lululemon (LULU) drives growth through market expansion, product innovation, and omni-channel integration. The company is valued at $40.4 billion and leverages physical stores and e-commerce to serve its global customers efficiently.

Looking back over the past 52 weeks, LULU stock has climbed by 9.8%, with an even more impressive 21% surge in the last month alone. These gains reflect the market’s confidence in its strategic direction.

Lululemon Surpasses Q4 Earnings

On March 27, Lululemon unveiled its financials for the fourth quarter of 2024, surpassing Wall Street’s expectations. The company’s net revenue soared 12.7% year over year, reaching $3.61 billion, comfortably outpacing the predicted $3.58 billion. The lion’s share of this growth came from international markets, which saw an impressive 38% jump in revenue.

Gross profit climbed 14.6% to $2.2 billion, while gross margins improved by 100 basis points to an impressive 60.4%. Net income also enjoyed a healthy boost, rising 11.8% to $748.4 million year over year. EPS followed suit, jumping 16.1% to $6.14, eclipsing the anticipated $5.85.

The company closed fiscal 2024 with a strong liquidity position, holding $2 billion in cash and cash equivalents, alongside $393.9 million available under its revolving credit facility.

In 2025, Lululemon anticipates opening 40 to 45 new company-operated stores and completing around 40 optimizations. Its new store launches will encompass approximately 10 to 15 locations in the Americas, with the majority of its international openings planned for China.

Moreover, Lululemon forecasts first-quarter 2025 net revenue between $2.335 billion and $2.355 billion, marking 6% to 7% growth. EPS is projected in the range of $2.53 to $2.58.

For the full year 2025, management expects net revenue between $11.15 billion and $11.3 billion, reflecting 5% to 7% growth, or 7% to 8% when excluding the 53rd week of 2024, with EPS guidance of $14.95 to $15.15.

Analysts anticipate Q1 2025 EPS to inch up 1.97% year over year to $2.59, with modest full-year growth to $14.65. 

What Do Analysts Expect for Lululemon Stock?

Ahead of the much-anticipated Q1 2025 earnings, Citigroup analysts have nudged LULU’s price target upward from $275 to $325, yet they’ve held firm on a “Neutral” rating. Their scrutiny reveals that Lululemon could very well surpass EPS expectations, buoyed by stronger-than-expected comparable sales across the Americas and China.

On a slightly more optimistic note, Morgan Stanley sets its sights higher, assigning a price target of $346 despite lowering it from a previous estimate, while maintaining an “Overweight” rating on the stock. Their outlook on Lululemon’s upcoming quarterly performance leans decidedly bullish.

Overall, LULU enjoys a “Moderate Buy” consensus. Out of 31 analysts tracking the stock, 15 favor a “Strong Buy,” two lean toward “Moderate Buy,” and 11 remain on the sidelines with a “Hold” recommendation. Meanwhile, one analyst suggests a “Moderate Sell,” and two see it as a “Strong Sell.”

The average price target of $353.20 represents potential upside of 4.7%, while the Street-high target of $500 suggests that the stock can climb as much as 48% from the current price level.