I’ve always been a fan of Lululemon. Their products—athletic apparel, footwear, and accessories—combine style, quality, and functionality in a way few brands manage. From sleek leggings to cozy hoodies, they make workout gear that people actually want to wear outside the gym. It’s no wonder Lululemon has cultivated such a loyal following.
But when it comes to their stock, things have been rough lately. Lululemon (LULU) has now dropped for consecutive quarters, recently hitting levels not seen since 2020. The company topped second-quarter earnings estimates but slightly missed revenue expectations. More concerningly, Lululemon said the effect of tariffs and the removal of the de minimis exception are hitting its sales. Tariffs, competition, and headwinds from peers like Alo have weighed heavily on investor sentiment—so far, Lululemon has lost 56% year-to-date.
Lululemon Athletica (LULU)
Despite the downturn, I find Lululemon stock appealing. Its current price is hovering around its 52-week low of $160.67, compared to a high of $423.32, making it look historically undervalued. Lululemon remains a highly recognized brand with strong products and loyal customers. While tariffs and other macroeconomic factors pose challenges, I believe the company is financially strong enough to weather short-term obstacles.
That said, I personally hesitate to jump in. Lululemon doesn’t pay dividends, and I prefer stocks that provide a steady income stream while I wait for long-term price appreciation. The “buy the dip” allure is real, but without dividends, the stock feels less immediately rewarding compared to some alternatives.
Interestingly, if I had to choose between investing in Lululemon stock or spending money on their products, I’d likely pick the latter. On the surface, it might seem counterintuitive—after all, stocks can grow in value but for me, the personal value of using Lululemon’s products outweighs potential financial gains. Money, in my view, isn’t just for investing; it’s meant to enhance life today, not just tomorrow. There’s joy in the tangible—the comfort of a favorite hoodie, the motivation from a pair of well-fitting leggings that investing simply can’t replicate.
In the end, Lululemon represents both opportunity and temptation: a company with strong brand equity facing hurdles. Whether the stock is a smart buy depends on our investing goals, tolerance for risk, and whether we value immediate enjoyment over potential future gains etc.
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