Is Lululemon Stock Worth More Than Its Competitors?
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Lululemon Athletica (LULU) stock trades at 8.4 times earnings, which is a lower price than Nike, Deckers Outdoor or Ralph Lauren. Yet Lululemon kept more of its sales as operating profit over its latest four quarters than any of those companies except Deckers. A price that low appears to assume that Lululemon’s profits are about to shrink. So how much more does Lululemon deliver than Nike, and can it keep that lead?
Lululemon Beats Nike’s Margin At Under Half The P/E
Lululemon beat Nike on both growth and margin over the latest four quarters each company reported. Lululemon turned 17.8% of its revenue into operating profit, against 8.2% for Nike. Revenue at Lululemon grew 1.7% across those quarters, while Nike’s fell 1.2%. Yet investors pay 17.8 times earnings for Nike, more than twice what they pay for Lululemon.
| LULU | NKE | DECK | VFC | RL | |
|---|---|---|---|---|---|
| Four Fiscal Quarters | ended 2026-08-02 (Q3 FY2025 to Q2 FY2026) | ended 2026-08-31 (Q2 FY2026 to Q1 FY2027) | ended 2026-06-30 (Q2 FY2026 to Q1 FY2027) | ended 2026-06-30 (Q2 FY2026 to Q1 FY2027) | ended 2026-06-27 (Q2 FY2026 to Q1 FY2027) |
| Market Value (USD billion) | 11.9 | 55.1 | 11.2 | 6.76 | 23.4 |
| P/E | 8.4 | 17.8 | 11 | 24.6 (not in the P/E rank) | 23.8 |
| Revenue Growth | 1.7% | -1.2% | 7.9% | 0.186% | 14.7% |
| Operating Margin | 17.8% | 8.2% | 22.7% | 6.4% | 16.4% |
| Total Return, Incl. Dividends, 2025-10-27 to 2026-10-28 | -42% | -44.1% | -10.8% | 6.1% | 16.6% |
Deckers Outdoor and Ralph Lauren are a different case. Both trade at higher P/Es than Lululemon, and both grew faster. Deckers’ figures in the table run through June; it reported its September quarter on October 22, 2026. Ralph Lauren’s revenue rose 14.7% over its latest four quarters. Lululemon’s lower price lines up with its slower growth against those two companies, but it does not line up against Nike.
Lululemon’s margin lead is real, but its latest quarter had help. The company reported an operating margin of 18.8% for the quarter that ended August 2, 2026, and management said a refund of tariffs it had paid added 5.6 percentage points to that figure. Without the refund, the margin would have been about 13.2%, against 20.7% a year earlier. That quarter is also one of the four behind Lululemon’s 17.8% margin. Without the refund, the four-quarter margin would be about 16.6%, which is still about twice Nike’s.
Are Sales Still Growing At Lululemon?
No. Lululemon’s revenue fell 4.3% from a year earlier in the quarter that ended August 2, 2026. North America was the weak region. Management said on the September 3, 2026 call that revenue there fell 8%. Sales of leggings dropped about 20% in the quarter, coming in below management’s own expectations.
Management said negative commentary in the media and on social channels hurt traffic, and some new products sold less well than planned. Lululemon has also changed who runs its products. The company hired the chief executive of Athleta as its chief product officer, a newly created role, on October 7, 2026. The hire came about a month after Heidi O’Neill took over as Lululemon’s chief executive.
Management expects the decline to deepen. It guides revenue for its third quarter to between $2.29 billion and $2.32 billion, a decline of 10% to 11% from a year earlier.
What You Don’t See In Lululemon’s Low P/E
Lululemon’s low P/E is set against the past year’s earnings, and management expects less for fiscal 2026. For that year, management guides earnings per share of $9.48 to $9.73, against $13.26 the year before. That range already includes $0.86 per share from the tariff refund. Management left another $105 million of possible tariff refunds out of the guide, citing uncertainty in the process.
Lululemon still earned more on each sale than Nike over the past year, but a tariff refund lifted its latest quarter’s margin, and its sales are falling. The price appears to assume that the sales decline lasts, and management expects sales to keep falling in its third quarter. Lululemon’s revenue against a year earlier is the number to watch when it reports in December 2026.
Does This Mean You Should Act On LULU?
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