Lululemon Athletica (LULU) shares have plunged 51.9% in 2025 due to slowing U.S. sales and changing consumer preferences in athletic wear. Increased competition and tariff changes have further impacted profitability, with margins under pressure.

Despite recent gains, LULU stock faces challenges ahead of its Q3 earnings on Dec. 11. Analysts predict a 10.1% potential post-earnings move, below the average. Lululemon’s financials are expected to be impacted by ongoing cost pressures and slowing demand, with revenue growth slowing and margins declining.

Lululemon anticipates Q3 revenue growth of 3-4%, down from 7% in the first half of 2025. Margins are projected to decline by 410 basis points, driven by tariffs and the removal of the de minimis exemption. Earnings per share are expected to drop by 22-24% year-over-year, reflecting near-term challenges.

Lululemon stock trades at a forward P/E ratio of 14.2x, a bargain considering its historical growth. However, softening U.S. demand and rising costs pose challenges. Analysts maintain a “Hold” consensus rating on LULU shares, anticipating a slow recovery due to competition and profitability pressure.

Read more at Yahoo Finance: Down 51.9% YTD, Is Lululemon Stock a Buy Ahead of December 11?