Fourth quarter results from Lululemon (LULU Quick QuoteLULU - Free Report)  will highlight this week’s earnings lineup with the apparel retailer set to release its Q4 report after-market hours on Thursday, March 27.

At times, the yoga-inspired athletic gear provider has etched out wonderful gains for investors, but LULU shares have fallen 11% year to date and have performed virtually flat over the last three years.

Although Lululemon has taken market share from historic athletic apparel leaders such as Nike (NKE Quick QuoteNKE - Free Report) , investors have been skeptical of the notion that the company’s exponential growth can continue.

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Lululemon’s Q4 Expectations

Rounding out its operating year for fiscal 2025, Lululemon’s Q4 sales are thought to have increased 12% to $3.59 billion compared to $3.21 billion in the prior period. On the bottom line, Q4 EPS is expected to be up 11% to $5.87 versus $5.29 per share a year ago.

Lululemon has surpassed sales estimates in three of its last four quarterly reports and has exceeded the Zacks EPS Consensus for 18 consecutive quarters. Notably, the Zacks ESP (Expected Surprise Prediction) does suggest Lululemon could once again surpass earnings expectations as the more recent concenus and Most Accurate estimate by Wall Street analysts has Q4 EPS pegged at $6.05 and 3% above the Zacks Consensus.    

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Full Year Expectations & Outlook

Overall, Lululemon’s total sales are slated to increase 10% to $10.62 billion from $9.62 billion in FY24. Annual earnings are slotted to rise 12% to $14.38 per share from EPS of $12.77 in FY24.

Looking ahead, Lululemon’s sales are forecasted to expand another 7% in FY26 to $11.42 billion with EPS projected to increase 7% as well to $15.36.

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LULU Valuation Comparison

Trading around $337, LULU stock is at 21.9X forward earnings multiple which is roughly on par with the benchmark S&P 500 and a noticeable discount to Nike’s 31.2X. That said, LULU does trade at a premium to its Zacks Textile-Apparel Industry average of 13.5X forward earnings with some of the other notable names in the space being Ralph Lauren (RL Quick QuoteRL - Free Report)  and Crocs (CROX Quick QuoteCROX - Free Report) .

Still, the leveling of Lululemon’s valuation may start to attract long-term investors as LULU trades well below its decade-long high of 90.3X forward earnings and is at a 33% discount to the median of 32.7X during this period.

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Bottom Line

For now, Lululemon's stock lands a Zacks Rank #3 (Hold). Reaching or exceeding Q4 expectations will be critical to regaining investor sentiment. Most importantly, positive guidance will be needed to reconfirm Lululemon’s attractive growth trajectory as ongoing tariff concerns have led to economic uncertainty and doubts about consumer demand.