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Lululemon just erased $10 billion in market cap in a single day.
Investors are panicking. Headlines are screaming. And if youāre holding LULU right now, youāre probably wondering:
āShould I sell before it drops more?ā
Hereās my honest answer: Iām not selling. Iām holding ā and maybe even buying more.
Let me explain why.š
š 1. Lululemon Isnāt Just a Yoga Brand Anymore
Lululemon (NASDAQ: LULU) has evolved far beyond its yoga-studio roots.
From innovative fabrics like Luon and Nulu, to cutting-edge menās performance wear and high-end athleisure, this company has become a global premium lifestyle brand.
And their numbers back that up:
š§āāļø 40% of sales now come from non-yoga categories
šŖ Menās segment has doubled in 3 years
š 30+ countries, with China revenue up 67% YoY
Lulu isnāt just selling leggings. Theyāre selling status. And in the retail game, brand is everything.
š° 2. The Crash: What Just Happened?
LULU plunged 14% on March 28, 2025, after issuing weaker-than-expected guidance.
But letās dig deeper:
š Forecasted 2025 revenue: $11.15Bā$11.3B (vs expectations of $11.5B)
š¬ Cited ācautious consumer spendingā due to macro concerns
šØš³ Tariff fears under a second Trump presidency also rattled sentiment
So yes, the stock fell ā but not because the business is broken. It was a guidance haircut, not a fundamental collapse.
š” Fun fact: Lululemonās stock dropped 16% in March 2020.
Within 18 months, it more than doubled.
History doesnāt repeat, but it often rhymes.
š° 3. Letās Talk Numbers (Because Feelings Donāt Pay the Bills)
Hereās what Q4 2024 looked like:
Metric | Result | YoY Change |
|---|---|---|
Revenue | $3.6B | +13% |
Net Income | $748.8M | +12% |
EPS | $6.14 | +16% |
Comp Sales (adj) | +3% | Slower |
š The numbers were good, not great. But far from bad.
Even more impressive?
Gross margins held strong at 58.2%
E-commerce sales grew 17%
Inventory growth was below sales growth = healthy ops
So why the freakout?
Expectations.
Wall Street expected a blowout. Instead, they got solid. And in todayās AI-hyped market, solid isnāt sexy.
But hereās the thingā¦
š 4. What Are Analysts Saying?
This is where the authority bias kicks in.
š¬ Truist Securities maintained a Buy rating but trimmed price target
š¬ Jefferies sees international expansion as the key upside catalyst
š¬ Out of 32 analysts:
23 say Buy
7 say Hold
2 say Sell
The average 12-month target? $365 ā thatās a 24% upside from todayās $293 close.
Oh, and insiders? Havenāt sold a share in months.
When smart money holds or addsā¦ I pay attention.
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š 5. The Outlook: Still Running Strong
Lululemon isnāt retreating ā theyāre expanding.
šŖ Planning 40ā45 new stores in 2025
š Most of them in China, where theyāre dominating premium fitness wear
š§āāļø New āBeCalmā and āGlow Upā lines to recapture female lifestyle spend
š¦ Inventory is lean. Store traffic is solid. E-comm is scaling fast.
Yes, consumer spending is cautious.
But you know what happens when that turns around?
Premium brands rebound the fastest.
Think Apple in 2009. Nike in 2017. Lululemon in 2020.
š§ My Final Verdict: HOLD (And Maybe Even Buy the Dip)
This isnāt a falling knife. Itās a healthy, cash-flowing, global brand that just got re-priced because of cautious guidance.
If youāre already holding, stay the course.
If youāre thinking of buying? Start a position ā donāt go all-in ā but donāt sleep either.
Because when LULU recovers (and I believe it will), this week will look like a gift.
š Final Thought
Youāll either look back and say:
āI bought LULU when it dipped to $290ā¦ā
Or
āI watched it rebound 40% from the sidelines.ā
The difference?
One decision. One click. One moment of patience.
Make it count.
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