Latest news with #Athletica
Yahoo
3 days ago
- Business
- Yahoo
Down 60%, Is the Worst Over for Lululemon Stock? The Answer May Surprise You.
Key Points Lululemon's stock fall is an overreaction from Wall Street. The stock's valuation looks cheap at current prices due to its long runway to grow internationally. Shares may fall further, but investors will be rewarded by buying and holding Lululemon stock for the long haul. 10 stocks we like better than Lululemon Athletica Inc. › Lululemon (NASDAQ: LULU) stock is down about 60% from highs set at the beginning of 2024. While the market is soaring on the back of artificial intelligence (AI) growth, Lululemon is faltering in a big way. Why? Because of slowing growth in North America. Wall Street is concerned the brand is losing its cachet with customers, facing more competition, and dealing with macroeconomic headwinds that will continue for years. While some might be worried about the next quarter, smart investors stay focused on the next decade. Does the recent stock price pullback make Lululemon a buy at its current price around $200? The numbers point to a clear answer for investors. Temporary headwinds in athleisure Multiple headwinds hit Lululemon over the last two years. Some self-inflicted, others from a broader athleisure spending cycle. In 2024, Lululemon's new styles did not impress its core customer base, with management admitting recently it needed to be more nimble to adapt to changing customer trends. Competition has grown in athleisure with upstarts such as Vuori and Alo Yoga, which is a strong narrative among investors worried about Lululemon losing its customers. From a broad economic perspective, spending on athleisure and casual clothing as a whole has waned in recent years after a COVID-19 pandemic boost. Despite all this pain, Lululemon's revenue grew more than 7% year-over-year last quarter, with impressive 22% growth in China. Competitors may be trying to step on Lululemon's toes, but it has been able to defend its turf with its omnichannel retail strategy. Profit margins remain high, at over 23% over the last 12 months. What's more, Lululemon is steadily expanding outside of just gym, yoga, and workout clothing. It now sells running shoes, which is a lucrative market (albeit highly competitive), as well has handbags, backpacks, and even polo and collared shirts for men. A valuation that gets more and more appealing Lululemon's stock price trajectory would make you think the business is collapsing, but as we can see, that is not happening. The brand has a lot of room to keep growing in China and wiggle its way into new geographies in the coming years. A new storefront in Milan's flagship shopping district is a big investment and shows how eager Lululemon is to expand into Europe. With this international expansion, Lululemon should be able to grow its revenue at a 5%-10% annual rate for the rest of the decade. The stock's current valuation seems to assume that the company will never grow its revenue again. To take advantage of this cheap valuation, Lululemon is greatly increasing its stock buyback program. Last quarter, it spent $430 million on share buybacks to reduce its shares outstanding by 1.4 million. As the number of shares come down, Lululemon's earnings per share (EPS) will rise, which will help the stock performance over the long haul. Is the worst over for Lululemon? Timing the bottom for a stock on its way to a turnaround is close to impossible. You could try to predict when revenue growth will stabilize, but that may be missing the forest for the trees. It is extremely difficult to predict short-term moves in the stock market. Lululemon's stock could fall another 20% from here, or it may be about to rise 20%. What should be easier to understand is the fact that Lululemon's stock is cheap relative to its past history of growth. It trades at a cheap P/E ratio around 12 and has a long runway to grow internationally. Management is buying back stock like it's about to go out of style. This combination should help investors stay confident that buying shares today will lead to strong performance over the next five to 10 years. The worst may or may not be over for Lululemon stock, but it remains a good buy and hold for the long term. Should you buy stock in Lululemon Athletica Inc. right now? Before you buy stock in Lululemon Athletica Inc., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Lululemon Athletica Inc. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $660,783!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,122,682!* Now, it's worth noting Stock Advisor's total average return is 1,069% — a market-crushing outperformance compared to 184% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy. Down 60%, Is the Worst Over for Lululemon Stock? The Answer May Surprise You. was originally published by The Motley Fool
Wall Street Journal
01-07-2025
- Business
- Wall Street Journal
Lululemon Sues Costco Over Alleged Knockoff Activewear
Lululemon LULU 2.88%increase; green up pointing triangle Athletica has filed a lawsuit against Costco COST -0.34%decrease; red down pointing triangle Wholesale, alleging that the warehouse-club chain is selling knockoff versions of its popular activewear through its Kirkland private-label brand. Lululemon said Costco has unlawfully traded on its reputation, goodwill and sweat equity by selling apparel that mimics the look and feel of its products—including its Scuba hoodies and sweatshirts, Define jackets and ABC pants—at lower prices.
CTV News
05-06-2025
- Business
- CTV News
Lululemon's Q1 profit reaches US$314.6 million, down from a year ago
A woman walks out from a Lululemon store next to Starbucks café inside a shopping mall, in Beijing, Thursday, April 10, 2025. (AP Photo/Andy Wong) Lululemon Athletica Inc.'s share price tumbled 20 per cent in afterhours trading as the company revealed its profit slid in its latest quarter. The Vancouver-based athletic retailer says its first-quarter net income totalled US$314.6 million, down from US$321.4 million in the same period a year earlier. Profits at the company, which keeps its books in U.S. dollars, amounted to US$2.60 per diluted share, up from US$2.54 per diluted share a year prior. Net revenue for the period ended May 4 was about US$2.37 billion compared with US$2.21 billion a year earlier. Lululemon's comparable sales increased one per cent overall but fell by two per cent across the Americas. The quarter encompasses a period when the U.S. was lobbing tariffs at Canada and Lululemon was working to bring more newness to its product range. This report by The Canadian Press was first published June 5, 2025. Tara Deschamps, The Canadian Press
