Lululemon Expects Holiday Quarter Revenue of $3.6 Billion Amid CEO Transition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 12 2026
0mins
Should l Buy BIRK?
Source: CNBC
- Holiday Quarter Expectations: Lululemon anticipates holiday quarter revenue nearing $3.6 billion and earnings around $4.76 per share, both at the high end of prior guidance, demonstrating resilience amid CEO transition and proxy battle.
- Discount Strategy Shift: Although historically cautious with discounts, Lululemon has increased markdowns to clear old inventory, resulting in a 2.9 percentage point decline in gross margins during Q3, reflecting intensified market competition.
- Competitor Performance: Birkenstock expects an 11% sales growth in the holiday quarter to €402 million ($470 million), but failed to meet investor expectations, leading to a 3% drop in shares during premarket trading.
- Overall Market Trends: While Savers Value Village reported an 8.4% sales increase during the holiday quarter, the company only reaffirmed its fiscal 2025 adjusted net income and EBITDA outlook, indicating cautious expectations for consumer spending.
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Analyst Views on BIRK
Wall Street analysts forecast BIRK stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BIRK is 59.05 USD with a low forecast of 49.00 USD and a high forecast of 66.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
13 Buy
2 Hold
0 Sell
Strong Buy
Current: 37.290
Low
49.00
Averages
59.05
High
66.00
Current: 37.290
Low
49.00
Averages
59.05
High
66.00
About BIRK
Birkenstock Holding plc operates through Birkenstock Group B.V. & Co. KG and its subsidiaries. Birkenstock is a global brand, which has developed a unisex portfolio of footbed-based products that serve consumers of all geographies, genders, ages, and income levels. Its proprietary footbed, which reflects the anatomy of the human foot, represents the foundation of its brand and products. It operates a vertically integrated manufacturing base and produces all its footbeds in Germany. BIRKENSTOCK offers a wide range of products that go beyond footwear, including sleep systems and natural cosmetics, catering to both entry-level and luxury markets. The Company operates its channels, utilizing the business-to-business (B2B) channel to facilitate brand accessibility while fully engaging consumers in its direct-to-consumer (DTC) channel, which offers its complete product range and access to its silhouettes.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Gross Margin Downgrade: The company has lowered its gross margin forecast from over 60% to a range of 57% to 58%, indicating pressure on profitability amid rising production costs and increased market competition, which could affect investors' long-term valuation of the company.
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- Cisco's AI Focus: Cisco anticipates earnings of $1.02 per share and revenue of $15.1 billion for Q2 FY2026, with CEO highlighting a major multi-year campus networking refresh, making AI infrastructure demand a critical growth driver.
- Importance of Employment Report: The January employment report is expected to show an addition of 80,000 nonfarm payrolls and an unchanged unemployment rate of 4.4%, directly impacting private consumption and U.S. GDP, making it crucial for investors to monitor.
- Consumer Price Index Insights: The January CPI is projected to increase by 2.5% year-over-year, with core CPI rising by 2.6%, providing essential inflation details despite not being the Fed's preferred measure, particularly regarding persistent shelter cost inflation.
See More
Birkenstock Investor Day Outlook Highlights
- Revenue Growth Revision: Birkenstock now anticipates revenue growth between 13% and 15% over the next two years, down from earlier mid-to-high teens forecasts, reflecting a shift towards B2B sales and production constraints that may weaken market confidence in the company's future performance.
- Gross Margin Downgrade: The company has lowered its gross margin forecast from over 60% to a range of 57% to 58%, indicating pressure on profitability amid rising production costs and increased market competition, which could affect investors' long-term valuation of the company.
- B2B vs. DTC Sales Disparity: Management highlighted that B2B sales require approximately 2.5 pairs sold to equal the revenue of one DTC sale, and while B2B orders are typically placed nine months in advance, their slower revenue growth compared to DTC impacts overall revenue performance.
- Stock Performance Weakness: Despite BTIG analysts maintaining a bullish outlook on Birkenstock, the stock has declined 39% from last year, reflecting market concerns over slower revenue growth and tighter margins, which may lead investors to remain cautious in the short term.
See More
Birkenstock May Enhance Performance with Updated Price Targets
- Birkenstock's Challenges: The company continues to face difficulties, with each setback revealing new issues for investors.
- Investor Sentiment: Despite ongoing challenges, there remains a sense of uncertainty and concern among investors regarding the brand's future.
See More
Birkenstock (BIRK) Shares Rise 5.1% After Trump Administration Cancels European Tariff Threats
- Tariff Threat Cancellation: The Trump Administration's cancellation of recent European tariff threats led to a 5.1% rise in Birkenstock's stock on Wednesday afternoon, directly alleviating market concerns regarding the company's gross margins and earnings outlook.
- Significant Earnings Impact: Given Birkenstock's European manufacturing base and heavy reliance on the U.S. market, any changes in U.S.-EU tariff policy can materially affect its cost structure and pricing strategy, with management having quantified the impact of tariffs on earnings multiple times.
- Positive Market Reaction: Despite Birkenstock's stock being down over 30% in the past 52 weeks, analysts maintain a consensus Buy rating, reflecting confidence in the company's long-term growth potential, especially in light of reduced tariff risks.
- Cost Passing Strategy: Birkenstock has implemented a strategy of passing some tariff costs onto consumers while absorbing others to protect its margins, a flexible approach that helps maintain relatively stable profitability in a competitive market.
See More
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- Unity Software Rating: Freedom Capital Markets analyst Nick McKay initiated coverage on Unity Software Inc. (NYSE:U) with a Buy rating and a price target of $52, suggesting an upside of about 18% from Thursday's closing price of $43.98, indicating optimism regarding its market position in gaming and real-time 3D content creation.
- Martin Marietta Rating: B. Riley Securities analyst Rohit Seth initiated coverage on Martin Marietta Materials, Inc. (NYSE:MLM) with a Neutral rating and a price target of $700, which implies a potential increase of around 9% from its Thursday closing price of $640.94, reflecting recognition of the company's stable performance.
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- Revenue Guidance Downgrade: Birkenstock expects Q1 2026 revenue of $467.99 million, slightly below the consensus estimate of $470.63 million, indicating pressure in market competition.
- Strong Euro Growth: The company projects reported revenue of €402 million for Q1, reflecting an 11.1% year-over-year increase, while constant currency growth is expected at 17.8%, highlighting the impact of U.S. dollar depreciation.
- Fourth Quarter Outperformance: In Q4 2025, Birkenstock reported sales of $615.404 million, exceeding the Street's expectation of $606.670 million, demonstrating resilience in the market.
- Cautious Future Outlook: The company anticipates adjusted earnings per share between $2.22 and $2.40 for FY 2026, slightly below analysts' estimate of $2.30, with sales forecasted at $2.689 billion to $2.747 billion, indicating uncertainty in future growth.
See More
