What Happened?

Shares of athletic apparel retailer Lululemon (NASDAQ: LULU) jumped 3% in the afternoon session after the company announced a new partnership with the National Football League (NFL) and sports merchandiser Fanatics to launch a collection of officially licensed apparel. 

This collaboration marked the athletic apparel retailer's first-ever venture into creating products for the NFL, covering all 32 teams. The collection was set to include a range of apparel and accessories for both men and women. The move represented a notable expansion for the yoga-wear company as it sought new avenues for growth beyond its traditional offerings. By entering the lucrative sports fan merchandise market, Lululemon positioned itself to reach new customer segments in a space long dominated by competitors like Nike and Adidas. Investors reacted positively to the news of the partnership.

After the initial pop the shares cooled down to $182.38, up 2.4% from previous close.

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What Is The Market Telling Us

Lululemon’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 6 days ago when the stock gained 5.5% on the news that BNP Paribas Exane upgraded the stock's rating from underperform to neutral. The analyst set a new price target of $146. 

This move suggested that some analysts believed the current price already reflected much of the negativity surrounding the company's recent performance. Lululemon had been struggling with weak sales in the U.S. as its styles grew stale. However, the company acknowledged the issue and planned to introduce a greater variety of new products. This focus on a revival, coupled with the view that much of the bad news was already priced in, gave the market a reason to react more positively.

Lululemon is down 51% since the beginning of the year, and at $182.38 per share, it is trading 56.7% below its 52-week high of $421.16 from January 2025. Investors who bought $1,000 worth of Lululemon’s shares 5 years ago would now be looking at an investment worth $546.34.

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