Comparative forecast for Lululemon Q3 FY2025 vs Levi's Q4 FY2025 | Analysis Date: December 1, 2025
| Metric | Lululemon Q3 FY2025 | Levi's Q4 FY2025 | Difference |
|---|---|---|---|
| Revenue | $2.18B | $1.62B | +$560M (Lulu) |
| YoY Growth | +12.4% | +6.8% | +5.6pp (Lulu) |
| Gross Margin | 58.2% | 42.1% | +16.1pp (Lulu) |
| Operating Margin | 18.5% | 11.3% | +7.2pp (Lulu) |
| EPS | $1.28 | $0.68 | +$0.60 (Lulu) |
| Confidence | 85% | 78% | +7pp (Lulu) |
Lululemon demonstrates stronger growth momentum and superior profitability metrics compared to Levi's. The athleisure segment continues to outperform traditional denim, with Lululemon's premium positioning supporting higher margins. Levi's faces headwinds from wholesale channel pressures but shows resilience in direct-to-consumer channels.
Q1 and Q2 FY2025 showed consistent DTC growth. Q3 typically benefits from back-to-school and early holiday shopping. Expecting 13-14% DTC comp growth with international expansion driving incremental revenue.
Lululemon's premium pricing power remains intact despite macro headwinds. Gross margins have stabilized at 57-58% range. Q3 product mix expected to favor higher-margin items (outerwear, accessories) ahead of winter season.
International segment growing 20%+ YoY. China and APAC markets showing strong momentum. Q3 benefits from summer season in Southern Hemisphere and holiday preparation in Northern markets.
SG&A deleverage from Q2 expected to reverse in Q3. Scale benefits from higher revenue base and improved inventory management. Operating margin expansion of 50-75bps anticipated.
Consumer spending slowdown could impact discretionary purchases. Wholesale channel facing headwinds. International FX headwinds could pressure margins by 20-30bps.
Q4 typically strong for Levi's due to holiday season, but wholesale partners reducing inventory. Expect wholesale revenue to be flat to slightly negative. DTC growth of 8-10% partially offsetting.
Gross margins under pressure from promotional activity and unfavorable product mix. Q4 holiday discounting expected to impact margins by 50-100bps. Operating leverage limited by fixed cost base.
DTC channels (retail and e-commerce) showing 8-10% growth with better margins. However, DTC represents ~40% of revenue, insufficient to fully offset wholesale decline.
Americas (60% of revenue) facing consumer spending pressure. Europe showing modest growth. Emerging markets contributing but from smaller base. Overall growth constrained to mid-single digits.
Deeper wholesale inventory corrections could accelerate. Consumer discretionary spending weakness could impact DTC. Supply chain normalization may pressure pricing. Competitive intensity from athletic brands increasing.