Zacks Investment Ideas feature highlights: Lululemon Athletica and Nike

For Immediate Release

Chicago, IL – December 4, 2025– Today, Zacks Investment Ideas feature highlights Lululemon Athletica Inc. LULU and Nike NKE.

LULU Q3 EPS Preview: Are Shares Stretched to the Downside Enough?

Founded in 1998 and based in Vancouver, Canada, Lululemon Athletica Inc. is a yoga-inspired athletic apparel company that designs, manufactures, and distributes athletic apparel and accessories for women, men, and children. The company offers a wide variety of fitness pants, shorts, tops, and jackets designed for athletic pursuits, such as yoga training, and running.

Lululemon sells its products primarily through brick-and-mortar retail stores, which are fixtures in most North American malls. However, the company is expanding through e-commerce, license and supply agreements, and retail locations worldwide.

LULU Q3 EPS Preview

As Lululemon's earnings report approaches, here's what you need to know:

· When: LULU will report EPS on Thursday, December 11^th, after the market closes.

· Wall Street Expectations: Analyst expectations are low for Lulu. Zacks Consensus Analyst Estimates expect sales growth of 3.72% and negative year-over-year EPS growth.

· Expected Move: The options market is currently pricing in a move of +/- 13% following its Q3 EPS announcement.

After being a top-tier market performer over the past decade, LULU shares have finally suffered a significant correction. Year-to-date, LULU shares are down 50%, underperforming the market and its peers by a wide margin. Below are LULU's three biggest challenges:

1. Tariff Hit: With manufacturing operations across Asia, LULU is among the companies most affected by tariffs. Tariffs and the removal of the de minimis exemption are squeezing LULU's margins, driving a $240 million hit in fiscal 2025 and a $320 million drag in fiscal 2026, despite mitigation efforts.

2. Competition Intensifies: Imitation is the sincerest form of flattery. However, in Lulu's case, it's impacting earnings. Several new, digitally native brands such as Alo Yoga, Rhone, and Vuori are challenging Lulu's brand. Meanwhile, established lifestyle brands like Nike are improving their "athleisure" offerings.

3. North America Business Slows: Although Lulu is expanding internationally, its largest business, North America, is contracting. Lulu customers are skittish amid higher interest rates and inflation fears.

Unfortunately, these headwinds are unlikely to subside any time soon. However, the real question for Q3 EPS will be, "With the stock down 50% YTD, is the bad news already priced in?"

Bottom Line

Lululemon's upcoming EPS report arrives at a critical moment. Once a premium growth standout, the retailer now sits in the middle of margin pressure, fierce competition, and slowing demand. With expectations already low and a stock that has corrected dramatically, the next EPS reaction may hinge on whether its poor results are priced in.

Why Haven't You Looked at Zacks' Top Stocks?

Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.

Today you can access their live picks without cost or obligation.

See Stocks Free >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

https://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research