LULU is the stock ticker for athletic apparel company Lululemon Athletica (LULU +1.24%). And Lululemon has done quite poorly for investors in 2025.

Investing $1,000 in Lululemon stock on Jan. 1 would have been a mistake. As of this writing, it’s the fourth-worst performer in the S&P 500 this year, having lost 52% of its value. This means that the $1,000 investment is worth just $480 now, even though the S&P 500 is up 16%.

Admittedly, almost any stock has a bad year on occasion. So how have Lululemon’s stock returns been over the last three to five years?

Image source: Getty Images.

Zooming out to see the big picture on Lululemon

Unfortunately for shareholders, zooming out doesn’t help Lululemon’s performance. Lululemon stock is down almost 50% over the last three years and down 49% over the last five years. Meanwhile, the S&P 500 is up 69% and 88% during these periods, respectively.

Lululemon’s business has performed much better than one might think from looking at the stock performance. Over the last five years, the company’s revenue has more than doubled, which is a remarkable achievement for any company. And its earnings per share (EPS) have more than tripled, which is exactly what investors should want to see.

Data by YCharts.

In short, Lululemon’s business has performed well, whereas the stock price hasn’t.

This is reflected in the valuation for Lululemon stock. Right now, it trades at just 11.5 times its earnings, which is its lowest valuation in more than a decade and its lowest valuation ever outside of the Great Recession.

Lululemon Athletica Inc.

Today’s Change

(1.24%) $2.25

Current Price

$184.19

In other words, investors are expressing heightened pessimism about the future of this business.

What about the next five years?

Lululemon’s fiscal 2024 ended on Feb. 2, 2025. During the fiscal year, sales in North America accounted for a whopping 75% of its total sales. But it’s the North American markets that are experiencing slowing growth. Meanwhile, sales are booming internationally.

In its fiscal second quarter of 2025, Lululemon grew net revenue in international markets (outside North America) by 22%. That’s a great growth rate that’s mostly overlooked because it’s still a small percentage of the overall business.

In short, even though sales are sluggish in its biggest markets, Lululemon has considerable room to grow internationally over the next five years. This revenue base is small now, but it could realistically double in size in the coming years. Therefore, investors may be overly pessimistic.

Given its strong profitability, its ongoing growth opportunities, and its currently cheap valuation, I believe it’s likely that Lululemon will perform much better over the next five years than it did in the last five.