Lululemon (LULU) is expected to report its third-quarter results after the closing bell on Thursday as the retailer grapples with slowing sales growth and concerns about increased competition as the critical holiday shopping season begins.

The stock, one of the worst performers in the S&P 500 (^GSPC) this year, has plunged more than 30% as newer brands like Alo and Vuori grab market share with trendier styles and products.

The stocks also significantly underperformed the consumer discretionary sector (XLY), which gained about 27% over the same period.

And although the stock has recovered from four-year lows hit in the summer, analysts have pointed to increased interest at the short-term level as a catalyst – making the long-term fundamental story all the more important.

According to Bloomberg consensus estimates, here’s what Wall Street expects from the report:

• Revenue: $2.36 billion compared to $2.20 billion in Q3 2023

• Earnings per share (EPS): $2.72 versus $2.53 in Q3 2023

• Same Store Sales: 2.5% year-on-year growth compared to 13% in Q3 2023

The company expected revenue of $2.34 billion to $2.37 billion and earnings per share of between $2.68 and $2.73 for the current quarter.

Same-store sales in North America were hit particularly hard. Consensus expectations point to a further 2% decline, following a 3% decline in the second quarter.

“With Lulu, we’re primarily watching how they perform in the U.S.,” Jessica Ramirez, senior research analyst at Jane Hali & Associates, told Yahoo Finance’s Morning Brief. “They had a slowdown in the previous quarter and we feel that could continue. They had talked about novelties (and) we saw some novelties… but not enough.”

“There’s more to come and there’s a lot more competition for Lulu,” Ramirez continued. “Everyone has been talking about Alo and Vuori, but there is also competition from emerging brands like On and Hoka, and even New Balance has started to branch out into apparel too.”

Lululemon CEO Calvin McDonald said during the company’s second-quarter earnings call in August that the retailer is “accelerating” new styles in performance shorts, tops and tracksuits.

“We are optimistic that we will see the benefits of these strategies in the coming quarter,” he said at the time.

Morgan Stanley analyst Alex Straton, who has an Overweight rating on stocks, reiterated the need for “newness” in the firm’s portfolio in a note to clients earlier this week.

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