Retailer Lululemon (LULU) impressed investors with stronger-than-expected holiday sales by reporting growth across various product categories, regions, and channels. At the ICR Conference, the company highlighted strong performance in outerwear, second layers, and bags. Partnerships with Disney (DIS) and the NHL also helped attract new customers, which further boosted results. As a result, 4.3-star Bank of America analyst Lorraine Hutchinson remains optimistic with a Buy rating.
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This is thanks to solid sales in China, which was due to new store openings and the earlier Chinese New Year. She also cited fresh fabrics, seasonal updates, and fewer markdowns as key drivers of gross margin improvements. Hutchinson believes Lululemon’s inventory management and distribution efficiencies position it well for continued gains in 2025.
It is also worth noting that Lululemon raised its Q4 revenue guidance to $3.56–$3.58 billion, which equates to 11%–12% year-over-year growth and beats its previous estimates. Furthermore, the company updated its EPS forecast to $5.81–$5.85, beating prior projections. Unsurprisingly, shares rose in today’s trading.
Is LULU Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on LULU stock based on 15 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 15% decline in its share price over the past year, the average LULU price target of $398.09 per share implies that shares are fairly valued.
