lululemon Eyes Asia Business for Expansion: Will It Move the Needle?

Asia has become a central pillar in lululemon athletica Inc.’s LULU long-term growth ambitions, with the region representing one of the brand’s strongest opportunities for market share gains and guest acquisition. Management emphasized that international momentum, particularly in China, continues to outpace North America, where the business is undergoing a product and assortment reset.

China, as lululemon’s second-largest market, remains critical to its global diversification strategy and brand elevation efforts. The company sees significant headroom to grow unaided awareness, expand its loyal guest base and strengthen its high-performance positioning across emerging Asian markets.

In the second quarter of fiscal 2025, lululemon delivered standout results in Asia despite macro-driven softness in certain Tier 1 Chinese cities. China Mainland revenues rose 25% (24% in constant currency), with meaningful comparable sales growth supported by new store openings, local activations and growing brand engagement. The Rest of World segment, driven largely by Asia-Pacific markets, also posted 19% growth (15% in constant currency).

These results underline the region’s resilience relative to the more challenged U.S. business, where casual and lounge categories are experiencing product fatigue. Asia continues to benefit from newer brand adoption curves, a healthier consumer appetite for performance wear, and rising demand across yoga, run, and training categories.

Looking ahead, lululemon is doubling down on Asia expansion with plans to open additional stores in China and enter India through a new franchise partner in 2026. For fiscal 2025, lululemon reiterated its guidance of 40-45 net new company-operated stores, including 15 stores in the Americas, with nearly half of this planned for Mexico. The rest of the store openings in fiscal 2025 are expected to occur in the international markets, primarily in China.

Management expects Asia to remain a key growth engine, supported by strong international momentum and its updated fiscal 2025 revenue outlook of 20–25% growth in Mainland China and 20% growth in the Rest of the World. With a refreshed product pipeline arriving in fiscal 2026, the company believes Asia will play a pivotal role in reaccelerating global performance and stabilizing overall results.

How LULU’s Competitors – RL & GES – Rely on Asia Growth?

As lululemon expands its Asian footprint, rivals Ralph Lauren Corporation RL and Guess?, Inc. GES are also counting on Asia’s rising consumer demand to drive their next leg of growth.

Ralph Lauren is intensifying its focus on Asia, where the brand continues to post some of its strongest growth, supported by rising consumer engagement and expanding digital reach. Asia delivered robust double-digit gains in the last reported quarter, led by exceptional strength in China and steady momentum in Japan. With new stores, deeper market penetration and an accelerating digital ecosystem, RL’s Asia strategy is positioned to be a key driver of long-term growth. 

Guess is sharpening its focus on Asia as a key pillar of long-term growth, leveraging rising brand demand and expanding distribution across major markets. The company is deepening its regional footprint through new stores, strengthened wholesale partnerships and enhanced product localization. As consumer engagement accelerates and international momentum outpaces North America, Guess expects Asia to play an increasingly important role in driving sustainable revenue and profitability gains.

The Zacks Rundown for LULU

lululemon’s shares have lost 55.4% year to date compared with the industry’s decline of 18.9%.

From a valuation standpoint, LULU trades at a forward price-to-earnings ratio of 13.11X, lower than the industry’s 15.79X.

The Zacks Consensus Estimate for lululemon’s fiscal 2025 earnings implies a year-over-year decline of 11.8%, whereas the consensus mark for fiscal 2026 suggests growth of 1.1%. Earnings estimates for fiscal 2025 have been southbound in the past 30 days. LULU currently carries a Zacks Rank #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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