Overview
- Lululemon shares have fallen roughly 44–50% from recent highs as investor expectations reset, leaving the stock at about 15x earnings versus roughly 36x for Nike.
- Lululemon’s direct‑to‑consumer model supports industry‑leading profitability, with operating margins near 22% and net margins around 15.7%, alongside a cash‑rich, low‑debt balance sheet.
- Near‑term pressures include slowing comparable sales in the U.S., softer China momentum, higher import costs tied to tariffs, and cautious guidance that has weighed on the multiple.
- Governance remains a watch point after founder Chip Wilson publicly pushed for board changes, raising execution‑risk concerns despite the company’s financial strength.
- For investors seeking income or a lower entry point, the coverage outlines selling a 12/18/2026 $150 put for about $940 per contract, implying roughly a 6.5% annualized option yield and lowering the effective purchase basis if assigned.