Lululemon Athletica Inc. (LULU) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Lululemon Athletica Inc.

Updated on October 19, 2026 · accounts published on September 3, 2026

Reading of October 16, 2026: A highly profitable, debt-light business whose margins are starting to slip

Lululemon Athletica trades at a P/E of 8.0× over the last 12 months, 83 % below its ten-year median of 47.7× and close to its decade low of 7.8×.

• Is Lululemon Athletica expensive or cheap? Its P/E of 8.0× over the last 12 months is 83 % below its ten-year median of 47.7× and 55 % below its sector's median.
• How is the business doing? Revenue grew 5 % over the last 12 months, but EPS fell 9 % and the operating margin of 18 % trails its 20 % long-run average.
• How strong is the balance sheet? Could it weather a recession? Cash covered all debt in fiscal 2025, leaving net debt to EBITDA at 0.0×, far below the 3× healthy ceiling for the sector.
• What to expect from the next earnings? Analysts expect EPS of $0.97 for the results due December 10, 2026; the company has beaten estimates 8 quarters in a row.

Is Lululemon Athletica expensive or cheap?

Lululemon Athletica trades at a P/E of 8.0× over the last 12 months. Its ten-year median is 47.7×, and the median for its sector, across 293 companies, is 17.9×. Over the decade the P/E has ranged from 7.8× to 104.6×, so today's multiple sits at the very bottom of that range. EV/EBITDA of 4.7× and a free cash flow yield of 7.3 % point the same way, and EV/sales of 1.9× in fiscal 2025 compares with a ten-year average of 5.5×. Peter Lynch warned that in cyclicals a low P/E can mark peak earnings. Here EPS fell 9.4 % and the stock lost 41 % in 12 months, so the market is pricing in further decline rather than rewarding a peak.

How is the business doing?

Revenue grew 5 % over the last 12 months while EPS fell 9 %, so profits are not keeping pace with sales. The operating margin of 18 % sits below the 20 % average for fiscal 2014-2025 and the 20 % of fiscal 2025: still high for consumer cyclicals, where 8 % is considered healthy, but compressing. Returns remain strong. ROIC of 20 % over the last 12 months is 10.6 points above the sector median of 9 %, and it has stayed above 10 % in each of the last ten fiscal years. The weak spot is inventory, which turned 2.8× in fiscal 2025, short of the 4× the sector treats as healthy. In retail, slow-moving stock ties up cash and tends to end in markdowns.

How strong is the balance sheet? Could it weather a recession?

In consumer cyclicals sales can fall sharply in a downturn, so the sector checks debt, liquidity and distress risk before anything else. Lululemon Athletica held $15.19 of cash per share against $15.12 of debt in fiscal 2025, a small net cash position of $0.07 per share. Net debt to EBITDA of 0.0× sits far under the 3× ceiling. The current ratio of 2.19 over the last 12 months clears the 1.5 threshold, and an Altman Z of 6.9 is well inside the safe zone above 2.99. Debt to equity is 0.45. The Piotroski score of 5 out of 9 is only middling, which fits a business whose profits are softening. Solvency is not in question; the open issues are margins and inventory.

What to expect from the next earnings?

Lululemon Athletica has beaten EPS estimates in each of the last 8 quarters. The latest results, on September 3, 2026, delivered $2.92 against $1.79 expected, a 63 % surprise and the largest of those 8 quarters. The next report, on December 10, 2026, carries an EPS estimate of $0.97. Even after that record beat, the fiscal 2027 EPS consensus barely moved in the last 30 days, from $9.58 to $9.61 across 18 analysts, and revenue forecasts were also flat. Of 71 analysts, 27 recommend buying, 37 holding and 7 selling. The coverage remains cautious despite the streak, so another clear beat would carry more weight than a merely in-line quarter.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.