- Dana Telsey of Telsey Advisory Group slashed her price target on the stock to $175 from $215 while maintaining a ‘Market Perform’ rating.
- UBS said leadership changes could either boost confidence and growth or weigh on the stock if U.S. performance weakens further.
- BTIG slashed its price target on the stock to $225 from $250 but kept a ‘Buy’ rating.
Wall Street has turned cautious on Lululemon Athletica Inc. (LULU) as the company’s near-term outlook has raised concerns about growth momentum, despite posting solid sales and earnings in fiscal 2025.
The apparel maker reported fourth-quarter (Q4) revenue of $3.6 billion and earnings per share (EPS) of $5.01, both surpassing analysts’ consensus estimates of $3.5 billion and $4.78 billion, respectively, according to Fiscal AI data.
For fiscal 2026, the company projects earnings per share in the range of $12.10 to $12.30, falling short of the estimated EPS of $12.54. Full-year revenue is also forecast between $11.35 billion and $11.5 billion, below consensus expectations. For the first-quarter, the company sees EPS in the range of $1.63-$1.68, below the consensus estimate of $2.07.
Guidance Clouds Near-Term Growth Picture
Dana Telsey of Telsey Advisory Group slashed her price target on the stock to $175 from $215 while maintaining a ‘Market Perform’ rating, according to TheFly. She highlighted that although Q4 metrics exceeded forecasts, the company’s first-quarter outlook and the upper end of its annual guidance fell short of market expectations.
Similarly, UBS lowered its price target to $176 from $189 and reiterated a ‘Neutral’ stance. The firm outlined a range of potential outcomes, noting that leadership changes could either restore investor confidence and support long-term growth or, alternatively, disappoint markets if underlying U.S. performance continues to weaken.
The company on Tuesday announced the appointment of the former CEO of Levi Strauss & Co (LEVI) as an independent director, amid calls for leadership changes.
Lululemon stock traded over 4% higher on Wednesday afternoon. On Stocktwits, retail sentiment around the stock remained in ‘extremely bullish’ territory amid ‘extremely high’ message volume levels.
BTIG Sees Long-Term Potential Despite Short-Term Weakness
BTIG maintained a more optimistic outlook, cutting its price target to $225 from $250 but keeping a ‘Buy’ rating. The firm pointed to improving sales trends in the Americas during Q4, while acknowledging that Q1 projections suggest a temporary slowdown.
Lululemon founder Chip Wilson on Tuesday urged the company to address key concerns, including board decisions around recent product rollouts following missteps, and outline plans to arrest declining same-store sales in North America before the weakness spreads to other regions.
LULU stock has declined by over 48% in the last 12 months.
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