Lululemon (LULU) Stock: Is Now the Time to Buy Before Tuesday’s Earnings Report?

TLDR

• Lululemon will release Q4 fiscal 2025 results after Tuesday’s closing bell on March 17.
• Wall Street forecasts earnings per share of $4.78, representing a 22.2% year-over-year decrease, alongside revenue of $3.57 billion, down 1.1%.
• Shares have plunged approximately 24% since the start of the year and more than 50% over the trailing twelve months.
• Analysts maintain a collective Hold stance, with a mean price target of $205.53 — roughly 30% higher than the current trading price.
• Chief Executive Calvin McDonald announced his departure, with the board currently seeking his successor.

As Lululemon approaches its Tuesday earnings announcement, the athleisure giant’s shares hover near multi-year lows. The stock has tumbled roughly 24% year-to-date and lost more than half its market value during the past year. Expectations are mixed as investors await quarterly results.

Lululemon Athletica Inc., LULU

Wall Street analysts project fourth-quarter revenue will reach $3.57 billion, marking a 1.1% year-over-year contraction. This represents a stark contrast to the 12.7% revenue expansion the company delivered in the comparable period last year. Earnings per share are anticipated to land at $4.78, reflecting a 22.2% year-over-year decrease.

Management previously indicated that fourth-quarter performance could approach the upper boundary of their guidance range, citing robust holiday shopping activity, increased foot traffic at retail locations, and successful promotional campaigns including their Black Friday initiatives.

Recent earnings results across the broader apparel industry have been inconsistent. Tilly’s reported 5.3% revenue growth and exceeded analyst projections, with shares surging 46.4% following the announcement. Zumiez achieved 4.4% revenue growth but saw its stock decline 10.9% after reporting. The apparel sector broadly has retreated approximately 9.7% during the past month.

LULU has fallen short of Wall Street revenue projections on several occasions throughout the previous two years. Analyst estimates have remained relatively stable over the past 30 days, indicating expectations for in-line results rather than significant surprises.

Leadership Transition Underway

Chief Executive Calvin McDonald revealed in January his intention to depart the role he has held since 2018. He is scheduled to remain with the organization as a senior advisor until March 31 while the board conducts its search for his replacement.

Should the company unveil a new CEO appointment concurrent with earnings results, investor sentiment could improve. Major leadership transitions often provide an opportunity to recalibrate market expectations and generate renewed optimism.

Global Expansion Offers Growth Potential

While foot traffic at North American locations has decelerated and domestic growth projections have been reduced, Lululemon has aggressively expanded its international footprint — especially in China and Mexico — through strategic new store launches aimed at compensating for sluggish performance in its home market.

This international expansion initiative represents one of the company’s most promising growth catalysts in the current environment.

From a valuation perspective, LULU presently trades at a forward price-to-earnings ratio of approximately 12.1x, notably beneath the sector median of roughly 16x. This valuation discount indicates that much of the recent negative sentiment may already be reflected in the share price.

Broader economic challenges persist as potential obstacles. Tariff uncertainties, inflationary pressures, and conservative consumer spending patterns — particularly among budget-conscious shoppers — could impact quarterly performance. Additionally, competitive intensity within the athleisure category continues to escalate.

The Street’s consensus recommendation stands at Hold, derived from one Buy rating and 17 Hold ratings issued during the previous three months. The average analyst price target stands at $205.53, compared to the current market price near $158.

Lululemon is scheduled to report fourth-quarter results after Tuesday’s market close on March 17.