Jim Cramer On Lululemon Optimism: 'Don't Know How They Could Be Pleased' As Stock Drops Over 10% In After-Hours Trading

Jim Cramer voiced skepticism about Lululemon Athletica Inc.‘s LULU latest earnings, posting on X, "I don't know how LULU could be pleased with how the quarter ended but not like how the next quarter began!"

What Happened: His comments followed a sharp after-hours selloff in the stock, which fell over 10% after the company issued weaker-than-expected guidance.

Lululemon reported fourth-quarter revenue of $3.61 billion, surpassing analyst estimates of $3.57 billion. Earnings per share came in at $6.14, exceeding expectations of $5.85 per share, according to Benzinga Pro. Year-over-year, revenue rose 13%, with international sales surging 38% while Americas revenue grew just 7%.

The company ended the quarter with $2 billion in cash and a total store count of 767 after opening 18 net new stores. Inventory levels increased 9% year-over-year to $1.4 billion.

I don't know how LULU could be pleased with how the quarter ended but not like how the next quarter began!
— Jim Cramer (@jimcramer) March 27, 2025

Why It Matters: Despite strong results, Lululemon’s first-quarter guidance disappointed investors. The company expects revenue between $2.335 billion and $2.355 billion, missing the consensus estimate of $2.39 billion.

CEO Calvin McDonald remained optimistic, emphasizing Lululemon's “Power of Three ×2 growth plan,” which aims to double revenue to $12.5 billion by 2026. However, investors reacted negatively, with the stock closing at $341.53 before plummeting to $307 in after-hours trading.

Analysts remain divided. Lululemon has a consensus price target of $396.19, with Oppenheimer setting a high of $500, while Jefferies issued a low target of $220. Recent ratings from Needham, Citigroup, and Telsey Advisory Group imply a 30.84% upside.

Price Action: Lululemon stock closed at $341.53 on Thursday, up 1.11%. After hours, it fell 10.11% to $307. The stock is down 8.27% year to date and 12.31% over the past year.

Lululemon is experiencing strong growth and momentum, according to Benzinga Edge, but its short- and medium-term price trends remain weak. For deeper insights, sign up for Benzinga Edge.

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