Jefferies Maintains Underperform on Lululemon (LULU), Trims Target to $175

Lululemon Athletica Inc. (NASDAQ:LULU) is one of the most oversold S&P 500 stocks so far in 2025. In a note published on July 2, Jefferies analyst Randal Konik shared his findings after visiting several key retail locations, including Roosevelt Field Mall, Walt Whitman Shops, and Woodbury Common Outlets, just ahead of the July 4th weekend. According to him, foot traffic appeared noticeably weaker across these sites.

Konik sees growing headwinds for Lululemon, citing increased markdowns, softer store traffic, and intensifying competition. He also points out that the company’s inventory is rising faster than its sales, which raises concerns about demand sustainability. In his view, the current strategy of expanding retail and outlet locations is doing little to support growth and may actually be working against the brand, contributing to margin pressure from rising rent costs and weakening brand perception.

A store employee in an athletic apparel store restocking merchandise.

Despite the company’s recent efforts, the analyst maintains a cautious stance. He continues to expect a decline in both U.S. sales and earnings per share in 2025. Reflecting this view, Konik reiterated his Underperform rating and lowered his price target on the stock to $175 from $200.

Lululemon Athletica Inc. (NASDAQ:LULU) designs and retails athletic apparel, footwear, and accessories for yoga, running, training, and most other activities.

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Disclosure: None. This article is originally published at Insider Monkey.