Needham downgraded Lululemon Athletica Inc. (NASDAQ: LULU) from Buy to Hold, with shares falling more than 1% in pre-market trading Thursday.
The firm said the last 18 months had been disappointing for Lululemon, and while new product launches were expected to lift U.S. sales in 2025, the competitive environment had proven too challenging.
Needham also said Street estimates for FY26 were too high, forecasting a mid-single-digit EPS decline compared with consensus expectations for flat performance. Analysts added that while the company had not harmed its brand, the U.S. market remained difficult, making it prudent to wait for signs of stabilization before turning more positive.
