📊 LULU Key Takeaways
Is lululemon athletica inc. (LULU) a Good Investment?
Strong brand economics evident in exceptional 54.2% gross margins cannot offset deteriorating operational trends: EPS declining 9.4% YoY despite 4.9% revenue growth signals margin compression or cost structure issues. Combined with critically weak returns on capital (ROE 4.0%, ROA 2.3%) and slowing growth, fundamental momentum is negative despite a fortress balance sheet.
lululemon remains a fundamentally strong business with premium profitability, high returns on capital, and an exceptionally clean balance sheet with no long-term debt. However, the latest period shows a weaker growth profile, with revenue up only modestly while net income and EPS declined, suggesting some pressure on operating leverage and earnings quality. The company still has strong financial resilience, but fundamentals currently support a balanced rather than aggressive stance.
lululemon athletica inc. Key Strengths (LULU)
- Exceptional gross margins (54.2%) indicate pricing power and operational leverage
- Fortress balance sheet: zero debt, $1.5B cash, 2.23x current ratio provide financial stability
- Positive operating cash flow ($214.4M) demonstrates sustainable business model quality
- High gross, operating, and net margins indicate a strong brand and pricing power
- Debt-free balance sheet, strong liquidity, and $1.81B in cash provide substantial financial flexibility
- ROE of 31.8% and ROA of 18.7% reflect efficient capital allocation and strong underlying business economics
LULU Stock Risks: lululemon athletica inc. Investment Risks
- EPS declining 9.4% YoY despite 4.9% revenue growth signals margin compression or cost inflation
- Critically weak returns on capital (ROE 4.0%, ROA 2.3%) indicate inefficient capital deployment
- Decelerating revenue growth (4.9%) in mature apparel market facing structural competitive pressure
- Earnings are declining despite positive revenue growth, which may indicate margin pressure or rising operating costs
- Revenue growth of 4.9% is relatively modest for a premium apparel company and may signal maturing demand
- Free cash flow margin of 8.3% is healthy but notably below accounting profitability, implying heavier reinvestment needs or weaker cash conversion
Key Metrics to Watch
- Gross margin trajectory and sustainability in coming quarters
- Operating expense ratio trend and EPS recovery path
- Return on equity improvement and capital efficiency initiatives
- Operating margin trend
- Free cash flow conversion relative to net income
lululemon athletica inc. (LULU) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 3.5% FCF margin may limit capital allocation flexibility. Strong liquidity with a 2.23x current ratio provides a solid financial cushion.
LULU Profit Margin, ROE & Profitability Analysis
LULU vs Consumer Sector: How lululemon athletica inc. Compares
How lululemon athletica inc. compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is lululemon athletica inc. Stock Overvalued? LULU Valuation Analysis 2026
Based on fundamental analysis, lululemon athletica inc. has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
lululemon athletica inc. Balance Sheet: LULU Debt, Cash & Liquidity
LULU Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: lululemon athletica inc.'s revenue has grown significantly by 77% over the 5-year period, indicating strong business expansion. The most recent EPS of $12.20 reflects profitable operations.
LULU Revenue Growth, EPS Growth & YoY Performance
LULU Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $2.4B | $195.0M | $1.69 |
| Q3 2025 | $2.4B | $306.8M | $2.59 |
| Q2 2025 | $2.4B | $370.9M | $3.10 |
| Q1 2025 | $2.2B | $314.6M | $2.54 |
| Q3 2024 | $2.2B | $248.7M | $1.96 |
| Q2 2024 | $2.2B | $341.6M | $2.68 |
| Q1 2024 | $2.0B | $290.4M | $2.28 |
| Q3 2023 | $1.9B | $248.7M | $1.96 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
lululemon athletica inc. Dividends, Buybacks & Capital Allocation
LULU SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for lululemon athletica inc. (CIK: 0001397187)
📋 Recent SEC Filings
❓ Frequently Asked Questions about LULU
What is the AI rating for LULU?
lululemon athletica inc. (LULU) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are LULU's key strengths?
Claude: Exceptional gross margins (54.2%) indicate pricing power and operational leverage. Fortress balance sheet: zero debt, $1.5B cash, 2.23x current ratio provide financial stability. ChatGPT: High gross, operating, and net margins indicate a strong brand and pricing power. Debt-free balance sheet, strong liquidity, and $1.81B in cash provide substantial financial flexibility.
What are the risks of investing in LULU?
Claude: EPS declining 9.4% YoY despite 4.9% revenue growth signals margin compression or cost inflation. Critically weak returns on capital (ROE 4.0%, ROA 2.3%) indicate inefficient capital deployment. ChatGPT: Earnings are declining despite positive revenue growth, which may indicate margin pressure or rising operating costs. Revenue growth of 4.9% is relatively modest for a premium apparel company and may signal maturing demand.
What is LULU's revenue and growth?
lululemon athletica inc. reported revenue of $2.5B.
Does LULU pay dividends?
lululemon athletica inc. does not currently pay dividends.
Where can I find LULU SEC filings?
Official SEC filings for lululemon athletica inc. (CIK: 0001397187) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is LULU's EPS?
lululemon athletica inc. has a diluted EPS of $1.69.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is LULU's fundamental grade?
Based on our AI fundamental analysis in June 2026, lululemon athletica inc. has a C grade with 74% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is LULU stock overvalued or undervalued?
Valuation metrics for LULU: ROE of 4.0% (sector avg: 18%), net margin of 7.9% (sector avg: 8%). Compare these metrics with sector averages to assess valuation.
What is LULU's AI grade for 2026?
Our dual AI analysis gives lululemon athletica inc. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is LULU's free cash flow?
lululemon athletica inc.'s operating cash flow is $214.4M, with capital expenditures of $127.4M. FCF margin is 3.5%.
How does LULU compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 7.9% (avg: 8%), ROE 4.0% (avg: 18%), current ratio 2.23 (avg: 1.5).