1. Recent Stock Performance

◦ Closed at 366.68** on February 17, 2025, down **-6.18%** for the day, but analysts maintain a **"Moderate Buy"** rating with a price target of **400-$416.

◦ Strong Q3 2024 results: Revenue up +9% YoY (reaching $2.4B), EPS growth of +13.4%, and improving margins.

2. Growth Drivers

◦ International Expansion (Especially China): Sales in China surged +39% YoY, with international sales expected to grow +30% annually through 2026.

◦ Product Innovation: New fabric technologies and designs enhance functionality; stores are evolving into "community hubs" combining fitness and retail.

◦ Brand Loyalty: Strengthened through social media, influencer partnerships, and membership programs.

3. Financial Health & Valuation

◦ Premium Valuation: P/E 25.92-26.53, P/S 4.20-4.24, reflecting market confidence in its growth.

◦ Outperforming Peers: Compared to Nike and Adidas, Lululemon’s higher valuation is justified by stronger growth and brand equity.

4. Risks & Challenges

◦ Economic Headwinds: Rising U.S. credit card delinquencies may curb spending, though its premium customer base is more resilient.

◦ Supply Chain Pressures: Global operations face logistics and raw material volatility risks.

◦ Saturation in North America: Growth slowed to +3-4%, requiring new products and enhanced in-store experiences.

5. Analyst Outlook

◦ FY 2025 EPS projected to grow +13%, with long-term growth anchored in China expansion and product diversification.

◦ Key metrics to watch: Same-store sales, DTC (direct-to-consumer) performance, and inventory turnover.

Conclusion

Lululemon’s triple-engine strategy—China growth, product innovation, and community engagement—solidifies its leadership in athletic apparel. Short-term stock volatility doesn’t diminish its long-term potential, but investors should monitor consumer spending trends and supply chain risks. A dip may present a buying opportunity, especially ahead of Q4 earnings and international expansion updates.

Report Link: Lululemon's Growth Strategy: International Expansion Insights | Monexai