Lululemon Athletica (LULU) just gave investors a reason to celebrate, delivering a third-quarter earnings report that crushed expectations and sent shares soaring more than 12% in premarket trading Friday. The athletic apparel retailer proved it can still grow even when North American shoppers are feeling cautious.
The Numbers Tell a Good Story
Lululemon reported earnings per share of $2.59 for the third quarter, blowing past analyst estimates of $2.27 by over 14%. Revenue hit $2.57 billion, comfortably ahead of the $2.48 billion Wall Street was expecting.
The geographic breakdown reveals what's really happening here. Net revenue in the Americas slipped 2%, which sounds concerning until you look overseas. International revenue surged 33%, with international comparable sales climbing 18%. The company is making serious headway in markets beyond North America, and that momentum is helping offset domestic softness.
Guidance Gets an Upgrade
Investors also got a pleasant surprise with updated guidance. Lululemon raised its fiscal 2025 revenue outlook to between $10.96 billion and $11.05 billion, and boosted its earnings per share forecast to a range of $12.92 to $13.02. The board sweetened the deal further by authorizing a $1 billion increase to the company's share repurchase program.
Leadership Transition on the Horizon
Alongside the strong financial results came major leadership news. CEO Calvin McDonald announced he'll step down on January 31, 2026. CFO Meghan Frank and Chief Commercial Officer André Maestrini will serve as interim co-CEOs while the company searches for a permanent successor. It's a planned transition, not a crisis move, and the market seems comfortable with the arrangement.
Wall Street Weighs In
Analysts responded positively to the report. Jefferies upgraded the stock from Underperform to Hold, raising its price target to $170. BofA Securities and Telsey Advisory Group kept their ratings but lifted price targets to $220 and $215, respectively.
Technical Picture
Lululemon shares were trading at $210.46 in premarket action, up 12.57%. The stock is now trading approximately 18.7% above its 50-day moving average of $173.80, suggesting solid short-term momentum. However, it's still about 11.1% below its 200-day moving average of $231.89, indicating the stock has room to run before hitting longer-term resistance levels.