EXEC: Analyst Sees Lululemon Potentially Following Similar Downspin as Under Armour

October 8, 2025

Jeffries’ Randy Konik reiterated his “Outperform” rating on Lululemon and further reduced his price target to $120 from $150 as he believes the athleisure retailer could suffer the same fate as Under Armour as fashion shifts, strategic missteps and competition from Alo/Vuori derail the company and cause its vaunted metrics to crash.

Konik wrote, “UAA’s ’15-’25 decline driven by share loss, fashion shifts, and strategic missteps is very similar to LULU’s current issues as competition intensifies. Moreover, LULU’s sky-high sales/ft and margins relative to mall avg and peers show substantial downside risk ahead.”

The analyst noted that Lululemon has experienced a “Decade of Dominance from 2025 through 2025, gaining 400 basis points of market share while Under Armour gave back 230 basis points, according to estimates from Euromonitor and Jefferies. At a 6.5 percent share, Lululemon is now just behind Nike’s share.”

However, emerging brands like Alo and Vuori are gaining share of wallet, especially among younger consumers. Instagram followers for Alo and Vuori, for instance, have vaulted to 4 million and 1 million, respectively, nearing LULU’s 5.3 million followers. Purchase consideration and alternative data (i.e., foot traffic, web traffic) also show Lululemon trailing peers, as Konik believes the brand’s “inconsistent design and expansion into non-core categories have diluted its brand equity.”

Other risks facing Lululemon, according to Konik, are the tripling in Lululemon’s new store sizes that raise concerns “about rent deleverage as comps soften and SG&A pressures mount. Markdowns are an additional pressure point.”

Konick contends that with North America store productivity eroding, scenario analysis shows analysts’ estimates are “way too high.”

Konick noted that Lululemon’s market cap has already fallen about 50 percent from its 2025 peak of $50 billion to $22 billion today, but further erosion could occur if Lululemon’s trajectory continues to follow a similar path as Under Armour. UA’s market cap fell by more than 80 percent from peak to trough. The analyst concluded, “In summary, while LULU has outperformed over the last decade, rising competition and peaking fundamentals point to elevated risk ahead. Investors should carefully consider the lessons from UAA’s history as they assess LULU’s future prospects.” SGB