Jefferies Maintains Underperform on Lululemon (LULU), Trims Target to $175
Konik sees growing headwinds for Lululemon, citing increased markdowns, softer store traffic, and intensifying competition. He also points out that the company's inventory is rising faster than its sales, which raises concerns about demand sustainability. In his view, the current strategy of expanding retail and outlet locations is doing little to support growth and may actually be working against the brand, contributing to margin pressure from rising rent costs and weakening brand perception.
A store employee in an athletic apparel store restocking merchandise.
Despite the company's recent efforts, the analyst maintains a cautious stance. He continues to expect a decline in both U.S. sales and earnings per share in 2025. Reflecting this view, Konik reiterated his Underperform rating and lowered his price target on the stock to $175 from $200.
Lululemon Athletica Inc. (NASDAQ:LULU) designs and retails athletic apparel, footwear, and accessories for yoga, running, training, and most other activities.
While we acknowledge the potential of LULU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: Harvard University Stock Portfolio: Top 10 Stock Picks and .
Disclosure: None. This article is originally published at Insider Monkey.
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