Lululemon (NASDAQ: LULU) was once a market darling. It is now one of the worst-performing stocks of 2025. Shares are off close to 50% so far in 2025 on rising fears of competition and macroeconomic headwinds in its athleisure category, with shares down over 60% from all-time highs. After a bustling few years with casual athletic clothing on the rise during the early days of the pandemic, consumers are now flipping to new categories.
And yet, there are still a lot of things to like about Lululemon’s business. With the stock trading at one of its cheapest levels ever, is Lululemon stock about to go parabolic for investors who buy today?
From the third quarter of 2020 to the fourth quarter of 2023, Lululemon’s trailing-12-month revenue in North America more than doubled from $3.5 billion to $7.6 billion. Since then, its trailing-12-month revenue has barely budged, hitting $8 billion over the last 12 months. Investors are not liking this revenue growth slowdown in the core North American market. Last quarter, Americas revenue increased just 4% year-over-year in constant currency.
While a slowdown should never be celebrated, it is important to take everything within a proper context. The entire athleisure category that Lululemon serves has struggled in recent years, especially in the Americas. Competitor Nike saw revenue drop 11% year over year last quarter, while Athleta slipped 6% (geographical revenue was not disclosed, but the brand is mainly centered in North America). This puts Lululemon’s slow 4% revenue growth in a better light.
Despite macroeconomic headwinds for the athleisure category, Lululemon has been able to grow market share and still expand in North America.
Image source: Getty Images.
North America is the ugliest part of Lululemon’s business, but international is firing on all cylinders. Total international revenue grew 20% year-over-year in constant currency terms last quarter, with China mainland revenue up 22% even with Chinese consumers facing a spending recession for the last few years after…
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