Lululemon Stock Dips After Nike's Q4 Report: What's Going On?

Lululemon Athletica Inc. LULU shares are trading lower Friday in sympathy with Nike, Inc. NKE which fell after reporting its quarterly earnings. 

The Details:

Nike shares have fallen more than 20% Friday after the company reported worse-than-expected fourth-quarter revenue and weak forward guidance. 

Nike's CFO, Matthew Friend, revised the company's outlook for fiscal 2025 lower and now anticipates a mid-single-digit decline in reported revenue. Nike also projected first-quarter revenue to be down approximately 10% and a high single-digit decline in sales for the first half of the year.

Lululemon's most recent earnings beat expectations with total revenue up 10% in the first quarter, and total comparable sales increased 6% year-over-year. However, the company provided soft second-quarter guidance with revenue in the range of $2.4 billion to $2.42 billion, versus estimates of $2.45 billion. 

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Is LULU A Good Stock To Buy?

An investor or trader's decision to buy or sell a stock is unique to their time horizon and risk tolerance. Many typical investors evaluate earnings growth and valuation on a particular stock before making a decision.

For example, for Lululemon Athletica, you'll notice that earnings in its last quarter grew 6.28% source. As an investor, you'll want to decide whether that's better or worse than what you'd like to see among stocks in your portfolio.

On the valuation side, Lululemon Athletica's price to earnings ratio – a measure of how much an investor pays for the company's earnings – is compressed 53.08% in the current quarter when compared with last year. That places it above similar businesses Ralph Lauren, Tapestry, Levi Strauss in its sector. You'll need to decide whether that makes it more or less attractive based on how you think the company will perform over time.

There are many different valuation metrics that may help you make a decision. Find more on Lululemon Athletica's quote page, or if you'd like a deeper dive in an advanced program, try Benzinga PRO for free.

LULU Price Action: According to Benzinga Pro, Lululemon Athletica shares are down 2.49% at $300.63 at the time of publication Friday.

Image: Courtesy of Lululemon Athletica, Inc.