On Thursday, Franklin Street Advisors disclosed that it sold out its entire position in Lululemon Athletica during the third quarter in an estimated $22.8 million transaction.
What Happened
Franklin Street Advisors reported in a Securities and Exchange Commission filing released on Thursday that it exited its entire stake in Lululemon Athletica (LULU -0.53%) during the third quarter. The fund sold all 95,891 shares, resulting in an estimated transaction value of $22.8 million for the period ended September 30, based on average prices.
What Else to Know
The fund’s Lululemon Athletica position previously represented 1.4% of AUM.
Top holdings after the filing:
- NVDA: $132.2 million (7.6% of AUM)
- MSFT: $115.2 million (6.6% of AUM)
- AAPL: $110.4 million (6.4% of AUM)
- GOOGL: $91.2 million (5.3% of AUM)
- AMZN: $72.5 million (4.2% of AUM)
As of Thursday afternoon, Lululemon shares were priced at $174.09, down 36% over the past year and well underperforming the S&P 500, which is up 16% during the same period.
Company Overview
MetricValuePrice (as of Thursday afternoon)$174.09Market Capitalization$20 billionRevenue (TTM)$10.9 billionNet Income (TTM)$1.8 billion
Company Snapshot
- Lululemon Athletica offers athletic apparel, accessories, and footwear for women and men, with core products including pants, shorts, tops, jackets, and fitness-related accessories.
- The company generates revenue through a mix of company-operated stores, direct-to-consumer e-commerce, and select wholesale and licensing arrangements.
- It targets health-conscious consumers and active lifestyle enthusiasts, with a strong presence in North America and expanding international markets.
Lululemon Athletica Inc. is a leading global retailer in athletic apparel, with a robust e-commerce platform. The company’s strategy emphasizes expanding its omnichannel footprint.
Foolish Take
North Carolina-based Franklin Street Advisors’ decision to liquidate its $22.8 million position in Lululemon Athletica underscores growing investor unease with the retailer’s slowing U.S. growth and declining profitability. The sale follows a rough year for the athletic apparel giant—Lululemon shares have dropped 36% over the past 12 months, sharply lagging the S&P 500’s 16% gain.
In its second-quarter 2025 results, Lululemon reported revenue up 7% year over year to $2.5 billion, driven by 22% international growth, but Americas sales rose just 1%, with comparable sales down 4% in the region. Meanwhile, operating income fell 3%, and margins contracted 210 basis points to 20.7%. CEO Calvin McDonald admitted U.S. execution was disappointing but said the company remains confident in its long-term plan to rebalance merchandise and accelerate growth.
Lululemon said it expected modest 3% to 4% revenue growth for the third quarter and warned that higher tariffs could contribute to annual gross profits falling by roughly $240 million. For investors, the stock’s pullback could signal an opportunity—but only if management delivers on its turnaround and global momentum offsets domestic weakness.
Glossary
13F assets under management (AUM): The total market value of securities reported by institutional investment managers in quarterly SEC Form 13F filings.
Liquidated: Sold off an entire investment position, converting it to cash.
Omnichannel footprint: A business strategy integrating multiple sales channels, such as physical stores and online platforms, for a seamless customer experience.
Direct-to-consumer e-commerce: Selling products directly to customers through a company’s own online platform, bypassing third-party retailers.
Wholesale: Selling goods in large quantities to retailers or distributors, rather than directly to end consumers.
Licensing arrangements: Agreements allowing another party to use a company’s brand, technology, or products for a fee.
TTM: The 12-month period ending with the most recent quarterly report.
Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Lululemon Athletica Inc., Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
