The Daily Beat - December 16, 2025 📈

There were no S&P 500 earnings reactions on Monday, but we want to highlight a name that appeared in yesterday's Beat Sheet.

This is the apparel retail giant, Lululemon $LULU.

Heading into last week's report, LULU was in a nearly 60% drawdown from its peak earlier this year.

Sentiment was in the gutter.

And investors had thrown in the towel.

Then earnings came in, and the script flipped quickly.

The company delivered a clean double beat, and the stock popped nearly 10% in a single session. 

That move didn't happen in a vacuum. 

Capital has been rotating aggressively into apparel retail, one of the strongest industry groups in the market right now. 

And when money starts flowing back into a group, the first thing to watch is how former leaders behave when they finally get good news again.

Under the hood, the quarter was better than the headlines suggest.

*Image is courtesy of LULU's latest conference call deck.

Revenue grew 7% year-over-year to $2.6B, while comparable sales rose 2% on a constant-currency basis. 

The real strength continues to come from outside the United States... 

International revenue surged 33%, with comparable sales up 18%, driven by ongoing momentum across China mainland, APAC, and EMEA. 

The management team acknowledged that the Americas remain a work in progress, but emphasized improving execution and encouraging early holiday trends.

Just as important, the balance sheet remains a source of strength. Lululemon ended the quarter with more than $1B in cash and expanded its share repurchase authorization by another $1B.

The market heard all of that loud and clear, and the price confirmed it immediately.

Friday's earnings reaction pushed LULU back to a key level of interest. A breakout above this level will put the final touch on a textbook bearish-to-bullish reversal pattern.

Sellers are exhausted, demand is starting to overwhelm supply, and the trend's character is changing.

Fundamentals are stabilizing, the market is responding positively to good news again, and prices are beginning to rise after a prolonged period of accumulation. 

Lululemon doesn’t need perfection from here. It doesn’t need a return to hypergrowth or flawless execution in every region. 

It just needs stabilization. 

With apparel retail serving as the leadership group and institutions clearly stepping back in, the path of least resistance is finally shifting higher.

For the first time in a long time, LULU looks less like a broken former leader and more like a stock in the early stages of a primary uptrend. 

That’s the kind of transition The Beat Report is designed to catch.

Thank you for reading

-The Beat Team