Lululemon shares have fallen roughly 10% year to date after a sharp selloff in early January, prompting a reassessment of the stock’s valuation. While the pullback has driven the forward price-to-earnings multiple below its five-year average, investors are weighing this relative discount against signs of softening U.S. demand. Margin pressure from elevated promotional activity and supply-chain costs further clouds the outlook for a near-term rebound, leading some analysts to recommend waiting for clearer evidence of stabilization before adding to positions.

The company’s Americas segment has underperformed expectations, with comparable-store sales growth in the mid-single digits compared to high-single-digit gains a year earlier. In contrast, international sales surged more than 20% on expanding store counts and strong e-commerce growth across Europe and Asia. Management reiterated guidance for fourth-quarter revenue to land at the high end of the previously communicated range, driven by holiday promotions and new product launches, while forecasting full-year operating margin expansion of at least 150 basis points.

Days after launching its ‘‘Get Low’’ legging collection, Lululemon temporarily paused online sales in response to customer complaints that the fabric did not provide sufficient opacity during workouts. The company reinstated the items on its website with fit and fabric disclaimers, advising shoppers to size up and pair the leggings with skin-tone undergarments. While this episode is unlikely to materially impact near-term revenue, it underscores the importance of rigorous product testing for a brand that charges premium prices for technical performance apparel.