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News  ›  The Motley Fool

3 Must-Know Facts About Lululemon Before You Buy the Stock

The Motley Fool Logo The Motley Fool By Neil Patel
3 Must-Know Facts About Lululemon Before You Buy the Stock

Lululemon reported Q3 results beating Wall Street estimates with $2.6B revenue and $2.59 EPS. While the stock surged 22% in a month, the company faces significant headwinds: U.S. sales declined 3% amid weak consumer confidence, though China showed strong 46% growth. Despite a cheap forward P/E of 15.4, the company's growth outlook has slowed dramatically from 21.5% historical CAGR to projected 4.5% growth, and the CEO is stepping down.

Insights
LULU   neutral

Mixed signals: strong earnings beat and China expansion are positive, but U.S. sales decline (-3%), slowing growth projections (4.5% vs. historical 21.5%), CEO departure, and 59% decline from peak in Dec 2023 are concerning. Cheap valuation (P/E 15.4) offers some upside potential but reflects low market expectations.