Analysis Report on Lululemon (LULU) Q4 Fiscal 2025 Earnings Guidance Update

According to Lululemon’s updated Q4 Fiscal 2025 earnings guidance[1][2][3]:

Metric	Guidance Range	Expected Value/Status
Net Revenue	$3.50B - $3.585B	Near upper end of range
Diluted Earnings Per Share	$4.66 - $4.76	Near upper end of range
Gross Margin	Unchanged	Stable
Selling, General & Administrative Expenses	Unchanged	Stable
Effective Tax Rate	Unchanged	Stable

This guidance update was released ahead of the ICR Conference, and the company clearly stated that there have been no operational changes, and its existing growth strategy remains unchanged[4].

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As of January 9, 2026, Lululemon’s closing price was

, down more than 50% from its 52-week high, with a decline of over the past year[0].

• Support Level
  : $200.35
• Resistance Level
  : $208.99
• Current Price
  : $203.90 (In the middle of the range)

Indicator	Status	Interpretation
Trend Judgment	Sideways Consolidation	No clear directional signal[0]
MACD	No Crossover Signal	Bearish Tilt[0]
KDJ	K:42.8, D:48.8	Bearish Tilt[0]
RSI	Normal Range	No Overbought/Oversold Signals[0]
Beta	1.02	Moves in line with the broader market[0]

Technical analysis shows that Lululemon is currently in a

, with weak short-term momentum, but the medium-term trend has not yet been fully established[0].

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Based on DCF valuation analysis, Lululemon’s current intrinsic value is significantly undervalued[0]:

Scenario	Intrinsic Value	Upside from Current Price
Conservative Scenario	$432.12	+111.9%
Base Case Scenario	$530.94	+160.4%
Bullish Scenario	$772.30	+278.8%
Probability-Weighted Value	$578.45	+183.7%

• WACC (Weighted Average Cost of Capital): 11.1%
• 5-Year Revenue Compound Annual Growth Rate (CAGR): 24.5%
• EBITDA Margin: 25.7%
• Beta Coefficient: 1.02[0]

Metric	LULU	Industry Average	Assessment
Price-to-Earnings (P/E) Ratio	13.88x	Below Average	Relatively Undervalued
Price-to-Book (P/B) Ratio	5.09x	Average	Reasonable
Return on Equity (ROE)	39.22%	Above Average	Excellent[0]
Net Profit Margin	15.72%	Above Average	Good[0]
Operating Profit Margin	22.04%	Above Average	Good[0]

Rating	Number	Percentage
Buy	32	46.4%
Hold	33	47.8%
Sell	4	5.8%

Consensus target of $198.00 (-2.9% from current price), with a range of $146.00 - $303.00[0]

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Lululemon has consistently delivered

in recent quarters[0]:

Fiscal Quarter	Actual EPS	Consensus EPS	Beat Margin	Actual Revenue	Consensus Revenue	Beat Margin
Q3 FY2025	$2.59	$2.22	+16.67%	$2.57B	$2.48B	+3.38%
Q2 FY2025	$3.10	-	-	$2.53B	-	-
Q1 FY2025	$2.60	-	-	$2.37B	-	-

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The global athleisure market is showing strong growth momentum[1]:

• 2026 Market Size
  : $415.28B
• 2031 Projected Market Size
  : $647.21B
• Compound Annual Growth Rate (CAGR)
  : 9.28%

• Nike: Losing market share, under pressure in the Chinese market[1]
• Adidas: Upgraded 2024 results, but facing tariff pressure[1]
• Lululemon: Regaining momentum after a series of disappointing results[3]

• Vuori
  : Gained endorsement from supermodel Kaia Gerber, increasing appeal to young consumers[1]
• Alo Yoga
  : Leveraging celebrity endorsements from Hailey Bieber, Kendall Jenner, etc.[1]
• Gymshark
  : 9% revenue growth in 2024, opened its first U.S. flagship store[1]
• On Running / Hoka
  : Continued expansion in the running shoe segment[1]

1. International Expansion Potential
   : The Chinese market contributes 28.1% of revenue, with significant growth potential for international business[0]
2. Product Structure Advantage
   : Women’s products account for 61.6%, men’s products account for 25.3%, with a balanced product mix[0]
3. E-Commerce Channel Growth
   : Continuous improvements to mobile applications and virtual shopping tools[1]
4. Brand Premium Capability
   : High-end positioning maintains a favorable gross margin level

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Factor	Impact
Q4 guidance near upper end of range	Indicates signs of holiday season sales rebound[2][3]
Consistent earnings beat performance	Improved management execution
Significant undervaluation per DCF model	183% upside potential for probability-weighted value from current price[0]
ROE as high as 39.22%	Strong shareholder return capability
High industry growth	9.28% CAGR market provides a favorable backdrop

Risk	Impact
Activist Investor Pressure	Elliott Management holds over $1 billion in shares, may push for changes[5]
Founder Governance Challenges	Chip Wilson nominated three independent director candidates[6][7]
Intensified Competition	Brands like Vuori and Alo Yoga are capturing market share[1]
Tariff Policy Uncertainty	Supreme Court delays tariff ruling, policy risks remain[8]
Leadership Transition Period	Uncertainty in strategy execution during CEO search

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1. Significance of Earnings Guidance
   : Q4 revenue and EPS guidance are near the upper end of the range, indicating
   signs of a rebound
   in holiday season sales, a positive signal following a series of disappointing results[2][3]

2. Valuation Attractiveness
   : The current stock price of $203.90 corresponds to a P/E ratio of 13.88x, which is below the historical average. The DCF model shows
   112% upside potential
   even under conservative assumptions[0]

3. Neutral Technical Picture
   : The stock is trading in the consolidation range of $200.35-$208.99, with no clear directional signal[0]

4. Optimistic Industry Outlook
   : The global athleisure market has a CAGR of 9.28%, providing a favorable growth backdrop for Lululemon[1]

• Conservative Target
  : $280 (~37% upside from current price)
• Reasonable Target
  : $350 (~72% upside from current price)
• Bullish Target
  : $450 (~121% upside from current price)

• Release of Q4 financial results on March 26, 2026
• CEO successor appointment
• Same-store sales growth in the U.S. market (Chinese business and international expansion are core growth drivers)
• Progress of tariff policies

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[1] Mordor Intelligence - Athleisure Market Size, Trends & Share Analysis Report (https://www.mordorintelligence.com/industry-reports/athleisure-market)

[2] Investing.com - Lululemon expects holiday-quarter revenue, profit to be at top end of prior forecast (https://www.investing.com/news/stock-market-news/lululemon-expects-holidayquarter-revenue-profit-to-be-at-top-end-of-prior-forecast-4441405)

[3] Bloomberg - Lululemon Rises as Holiday Sales Show Signs of Rebound (https://www.bloomberg.com/news/articles/2026-01-12/lululemon-rises-as-holiday-sales-show-signs-of-rebound)

[4] Business Wire - Lululemon Updates Revenue and Earnings Expectations for Q4 Ahead of ICR Conference (http://www.businesswire.com/news/home/20260112187515/en/)

[5] CNBC - How activist Elliott can help reinvigorate athleisure giant Lululemon (https://www.cnbc.com/2026/01/10/how-activist-elliott-can-help-reinvigorate-athleisure-giant-lululemon.html)

[6] Retail Insider - Chip Wilson’s Board Picks Reveal Lululemon’s Deeper Problem (https://retail-insider.com/retail-insider/2026/01/chip-wilsons-board-picks-reveal-lululemons-deeper-problem/)

[7] Yahoo Finance - The Bull Case For Lululemon Could Change Following Chip Wilson’s Boardroom Challenge (https://finance.yahoo.com/news/bull-case-lululemon-athletica-lulu-100816830.html)

[8] The Fool - Why Lululemon Stock Was Sliding Today (https://www.fool.com/investing/2026/01/09/why-lululemon-stock-was-sliding-today/)

[0] Gilin AI Financial Database - Market Data, Technical Analysis, Financial Analysis, DCF Valuation