Is lululemon athletica Stock Underperforming the S&P 500?

Valued at a market cap of $19.9 billion, lululemon athletica inc. (LULU) is a premium athletic apparel brand known for yoga wear, leggings, and performance-focused lifestyle products. 

Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and lululemon fits this criterion perfectly. Its key strengths include premium, innovative products, strong brand reputation and customer loyalty, a robust retail, all of which help maintain its competitive edge in the athletic apparel market.

However, LULU stock has declined 61.3% from its 52-week high of $423.32 touched on Jan. 30. LULU's stock has dipped 36.6% over the past three months, underperforming the S&P 500 Index ($SPX), which has returned 8.2% over the same time frame.

In the long term, shares of LULU dropped 33.7% over the past 52 weeks, notably trailing $SPX’s 18.9% over the same time frame. Additionally, lululemon stock has declined 57.1% on a YTD basis, whereas $SPX has surged 11.1%. 

The stock has been trading below its 50-day and 200-day moving averages since early June, indicating a bearish trend. 

On Sept. 4, lululemon released its fiscal 2025 second-quarter results. It reported a 7% year-over-year revenue increase to $2.5 billion, with earnings per share of $3.10, surpassing analyst expectations. However, the company faced challenges as U.S. comparable sales declined by 4% and gross margin decreased to 58.5%, impacted by markdowns and tariff-related costs.

Consequently, Lululemon lowered its full-year revenue forecast to $10.85–$11 billion and EPS to $12.77–$12.97, citing weak U.S. demand and increased tariffs. Investors panicked post the earnings release and sent its shares plunging 18.6% in the next trading session. 

Compared to its peer, Burlington Stores, Inc. (BURL) has outperformed LULU stock. BURL stock has gained 5.9% over the past 52 weeks, but has declined 1.9% on a YTD basis.

LULU has a consensus rating of “Hold” from the 31 analysts covering the stock. Additionally, the mean price target of $205.08 indicates a premium of 25.1% from the current market prices.