Lululemon reported better-than-expected Q3 earnings and upgraded its 2025 outlook, driving investor interest and pushing the stock to a new high. The apparel retailer’s revenue and profit growth, along with global expansion momentum, reinforce its resilience in a challenging retail environment.
- LULU posted Q3 adjusted EPS of $2.43, beating estimates by $0.21
- Revenue rose 15% YoY to $1.87 billion, with international sales up 22%
- 2025 full-year revenue guidance raised to $7.55–$7.65 billion
- Adjusted EPS forecast upgraded to $9.60–$9.80
- Direct-to-consumer channel now represents 63% of total revenue
- Stock gained over 8% in after-hours trading following report
Lululemon Athletica Inc. (LULU) emerged as a standout performer in the consumer discretionary sector after reporting third-quarter results that exceeded analyst expectations. The company reported adjusted earnings per share of $2.43, surpassing the consensus estimate by $0.21, on revenue of $1.87 billion, a 15% year-over-year increase. This growth was fueled by strong demand across North America and continued expansion in international markets, where revenue rose 22% year-over-year. The company’s updated full-year 2025 guidance raised the bar, projecting revenue between $7.55 billion and $7.65 billion, up from the previous range of $7.4 billion to $7.5 billion. Adjusted EPS guidance was raised to $9.60–$9.80, reflecting improved margins and disciplined inventory management. These upgrades signal confidence in sustained top-line momentum and operational efficiency, particularly in its direct-to-consumer channels, which accounted for 63% of total revenue during the quarter. Market reaction was immediate, with LULU shares climbing over 8% in after-hours trading, marking a 45% year-to-date gain and a 25% rise since the start of the fiscal year. The stock now trades at a forward P/E of 52, reflecting investor optimism despite elevated valuation. Analysts at major investment firms have upgraded the stock to 'Buy' or 'Outperform' following the report, citing the company’s pricing power, brand loyalty, and ability to navigate macroeconomic headwinds. The move comes amid broader retail sector volatility, with many apparel stocks under pressure due to inflation and shifting consumer behavior. LULU’s consistent execution—highlighted by a 10% increase in average transaction value and a 12% rise in active members in its loyalty program—suggests stronger-than-expected consumer stickiness. The company’s strategy to double its store count in Asia and expand digital infrastructure further supports long-term growth potential.