Lululemon Turned $1,000 Into $571 Over Three Years While Staying Profitable

2 days ago 5

William Temple

Tue, December 9, 2025 astatine 8:29 AM CST 3 min read

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Lululemon banal fell 62% from $414 to $160 betwixt January and November contempt beating net successful 8 of 10 quarters.
The institution trades astatine 12.5x net with 42.4% ROE and 16.4% nett margins.
Insiders sold shares astatine $178 with nary buying enactment during the decline.
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Lululemon Athletica (NASDAQ: LULU) spent years gathering a estimation arsenic the premium athleisure brand. From yoga studios to metropolis streets, the Vancouver-based institution carved retired a ascendant presumption successful high-margin diversion wear. The concern exemplary worked: harvester method innovation with manner branding, complaint premium prices, and ticker customers enactment up.

Then 2025 happened. What started arsenic a banal trading astatine $414 successful January collapsed to $160 by November, a 62% freefall that destroyed billions successful marketplace value. The institution didn't implode. Revenue inactive grew 6.5% twelvemonth implicit year. Earnings dipped conscionable 1.6%. Lululemon bushed expert estimates successful 8 of the past 10 quarters, including a 7.3% astonishment successful its astir caller report. The fundamentals stayed remarkably unchangeable portion the banal terms cratered.

The disconnect betwixt concern show and banal show defines the Lululemon communicative of 2025. While competitors struggled with borderline pressure, LULU maintained a 16.4% nett borderline and 42.4% instrumentality connected equity. The institution generated astir $11 cardinal successful trailing revenue. Yet investors fled anyway, treating the banal similar a failing retailer alternatively than a profitable maturation institution trading astatine conscionable 12.5 times earnings.

1-Year Return

This infographic details the steep diminution of a $1,000 concern successful Lululemon (LULU) from January to November 2025, showing a 62% banal freefall contempt seemingly unchangeable concern performance.

Initial Investment: $1,000
Current Value: $479
Total Return: -52.1%
S&P 500 (same period): Data unavailable for comparison

3-Year Return

Initial Investment: $1,000
Current Value: $571
Total Return: -42.9%
Annualized Return: -16.9%
S&P 500 (same period): Data unavailable for comparison

The numbers are brutal. A $1,000 concern made 1 twelvemonth agone would beryllium worthy $479 today. Extend that to 3 years and you're astatine $571. The peak-to-trough diminution erased implicit $250 per stock successful 10 months.

What drove the collapse? Not net misses. Not gross declines. The marketplace simply stopped believing successful the maturation story. When a premium-priced banal loses its premium multiple, the mathematics gets disfigured fast.