Can Footwear & Menswear Businesses Reinvent lululemon's Growth Story?

lululemon athletica inc.’s LULU second-quarter fiscal 2025 earnings call shows the brand at an inflection point, especially as U.S. sales soften and core casual franchises lose steam. Yet within this slowdown, lululemon’s men’s business remains a bright spot, growing 6% year over year in second-quarter fiscal 2025, supported by strong engagement from newer guest cohorts and continued momentum in performance categories like run, train, golf and tennis.

Management emphasized that performance apparel is still a key differentiator, helping the brand gain market share even as the U.S. activewear market declines. This strength gives lululemon a solid platform to expand its menswear positioning further as it refreshes and modernizes its product pipeline.

Footwear also holds strategic potential, particularly as the company leans into innovation and the “Science of Feel” platform that has already driven successful launches in apparel. While footwear was not highlighted as a current growth engine on the call, lululemon’s renewed focus on agility, faster product cycles and expanding newness from 23% to 35% by spring 2026 signals an environment where adjacent categories like footwear can scale more rapidly.

Leadership stressed the importance of reacting faster to guest demand, tightening lead times and using new design talent to infuse fresh energy across the assortment. These capabilities are critical for competing in a crowded performance and athleisure landscape and could make footwear a bigger contributor as the brand reaccelerates product innovation.

Ultimately, the push to rebalance the assortment, refresh casual offerings and strengthen performance innovation sets the stage for a broader reinvention, one in which menswear and footwear can play meaningful roles. As lululemon works through near-term tariff pressures, softer U.S. trends and elevated markdowns, management remains confident that the brand’s loyal guest base and strong design pipeline will drive a more pronounced rebound beginning in 2026. If executed well, expanding these underpenetrated categories can help unlock the next chapter of sustainable, multi-year growth.

Can LULU Stay Ahead as CROX & RL Rewrite Their Growth Stories?

As lululemon navigates a cooling U.S. market and recalibrates its product engine, fast-rising competitors like Crocs Inc. CROX and Ralph Lauren Corporation RL are rewriting their growth stories, raising the stakes for LULU’s next chapter.

Crocs’ growth story is being reinvented through disciplined brand management, tighter inventory control and a sharpened focus on innovation. The company is protecting long-term brand health by pulling back on digital promotions and reducing wholesale receipts, while leaning into new product franchises like the Crafted Clog, Echo RO and expanded Sandals collections. Strong international momentum, particularly in China and Japan, along with disruptive TikTok Shop engagement, is also helping reaccelerate demand.

Ralph Lauren’s growth story is being reinvented through its “Next Great Chapter: Drive” strategy, which is fueling broad-based momentum across regions and channels. Strong brand elevation, powerful global activations, from sports partnerships to fashion shows, and high-quality core product demand are driving double-digit retail comps. With surging performance in Asia, especially China, rising AUR and disciplined expansion in key cities, RL is unlocking diversified, durable engines of long-term growth.

The Zacks Rundown for LULU

lululemon’s shares have lost 8.1% in the past three months compared with the industry’s decline of 5.7%.

From a valuation standpoint, LULU trades at a forward price-to-earnings ratio of 14.06X, lower than the industry’s 16.31X.

The Zacks Consensus Estimate for lululemon’s fiscal 2025 earnings implies a year-over-year decline of 11.9%, whereas the consensus mark for fiscal 2026 earnings suggests growth of 0.7%. Earnings estimates for fiscal 2025 and 2026 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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