Lululemon (LULU) has had quite a tumultuous year in 2025, with its stock price experiencing significant highs and lows. At the start of the year, LULU stock reached a peak of around $423 before plummeting to a low of $159 due to growth deceleration. However, there has been a slight recovery since then, with the stock now trading at $209, albeit still down 45% year-to-date.
One of the recent positive developments for Lululemon is the revelation that Elliott Investment Management holds a stake exceeding $1 billion in the company. As one of the largest investors, the activist investor is advocating for a change in management. Additionally, Lululemon founder Chip Wilson has initiated a proxy fight for a board shakeup, nominating three independent directors. With the departure of CEO Calvin McDonald, the potential management restructuring could serve as a catalyst for LULU stock.
Lululemon, known for its technical athletic apparel, footwear, and accessories, currently operates in 30 global markets through its various channels. In the third quarter of 2025, the company reported 796 stores worldwide, generating $2.6 billion in revenue with diluted EPS of $2.59, reflecting a 9.8% decrease year-over-year.
Despite facing tough competition and sluggish revenue growth, LULU stock has declined by 12% in the past six months. However, recent expansion plans and the possibility of a management overhaul have contributed to a resurgence in the stock’s performance.
In its Q3 results, Lululemon saw a decline in Americas net revenue but a significant increase in international net revenue and comparable sales. The company’s expansion into new markets like Greece, Austria, Poland, Hungary, Romania, and India is expected to drive global growth and revenue acceleration.
Furthermore, Lululemon is developing a robust outerwear collection, which could set it apart from competitors and boost profitability. The impending CEO succession, with former Ralph Lauren executive Jane Nielsen being considered for the role, is anticipated to have a substantial impact on value creation in 2026 and beyond.
Financially, Lululemon ended Q3 2025 with a cash reserve of $1 billion and an undrawn credit facility of $593 million, providing ample liquidity for international expansion and product innovation. Analysts currently rate LULU stock as a consensus “Hold,” with a mean price target of $205, suggesting a slight downside potential.
With a forward price-earnings ratio of 16.25, LULU’s valuation appears attractive, especially if there is a rebound in revenue and EPS growth. As the company undergoes leadership changes and expands internationally, the outlook for LULU seems optimistic following a challenging year.
