What Happened?
Shares of athletic apparel retailer Lululemon (NASDAQ: LULU) fell 19.4% in the afternoon session after the company reported underwhelming Q1 2025 results. Its EPS guidance for next quarter missed and its full-year EPS guidance fell short of Wall Street's estimates.
Sales and earnings were roughly in line with expectations, with the softness resulting from slowing growth in the Americas, where comparable sales declined, despite international markets continuing to deliver significantly better growth. Overall, this was a weaker quarter.
The shares closed the day at $265.29, down 19.6% from previous close.
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What The Market Is Telling Us
Lululemon’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for Lululemon and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 18.4% on the news that the company reported strong third-quarter results, which surpassed analysts' revenue expectations on a convincing same-store sales beat. The result revealed strong double-digit top-line growth in China and the rest of the World. The company also observed record engagement metrics at the top of the funnel during the Black Friday event mostly from its online channels. This signaled a strong start to the holiday shopping season. Looking ahead, guidance was roughly in line, which was encouraging. Overall, this quarter had some key positives.
Lululemon is down 28.7% since the beginning of the year, and at $265.41 per share, it is trading 37% below its 52-week high of $421.16 from January 2025. Investors who bought $1,000 worth of Lululemon’s shares 5 years ago would now be looking at an investment worth $841.77.
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