Lululemon analysts reboot stock price target after earnings
The recent earnings report from athleisure giant Lululemon left investors reeling as the company beat Wall Street’s first-quarter expectations but slashed its full-year guidance. The stock took a nosedive on June 6, citing a “dynamic macroenvironment” that included increased competition and the impact of the Trump administration’s tariffs.
Chief Executive Calvin McDonald addressed the uncertainty brought by the current tariff paradigm, stating that they are better positioned than most to navigate the near term while still focusing on long-term growth potential. Chief Financial Officer Meghan Frank highlighted a thinner operating margin for the full year, driven by the net impact of tariffs.
Despite the challenges, Lululemon remains committed to strategic price increases on a small portion of their assortment to offset the impact of tariffs. Comparable sales in the quarter rose 1%, with international sales outperforming domestic ones.
President Donald Trump’s fluctuating tariff policies have caused widespread confusion among companies and consumers. Several retailers have adjusted their guidance and indicated they would raise prices in response to the uncertainty. Trade talks between the US and China continue, with hopes for a positive outcome.
Following the earnings report, investment firms issued research reports on Lululemon, with varying reactions. Needham lowered its price target but affirmed a buy rating, citing aggressive stock selloff relative to the guidance cut. Telsey Advisory also adjusted their price target but maintained an outperform rating, noting strong consumer response to new products.
BMO Capital lowered its price target and maintained a market-perform rating, citing a slight beat to estimates but a lowered outlook for gross margin and earnings due to tariffs and markdowns. This marks the first time Lululemon has lowered its fiscal-year earnings forecast at Q1 since fiscal 2014.
Despite the challenges ahead, Lululemon remains optimistic about its growth potential and ability to navigate the uncertain retail environment. The company’s commitment to innovation and community-building through its advanced athletic apparel sets it apart in the competitive athleisure market.
This article was originally reported by TheStreet on Jun 7, 2025, where it first appeared. Stay tuned for updates on Lululemon’s stock performance and strategic initiatives as they navigate the ever-changing retail landscape.
