People love their credit card rewards. Whether through the psychological impact of knowing you earned points on every swipe or the upscale perks these companies offer, premium cards have been a mainstay in popularity in the United States for years.
The king of premium credit cards is American Express. With its Gold and Platinum cards, the company has built a credit card spending ecosystem focused on travel, entertainment, and premium shopping.
Recently, American Express made a big refresh on its highest-fee Platinum card. A surprise cash back partner was announced as a perk for the new Platinum card: Lululemon (LULU -0.16%). The struggling apparel retailer is offering huge rebates to these Platinum cardholders, which investors may be underrating as a growth driver for the brand over the next few years.
Image source: Getty Images.
Here's why this deal could revive growth for Lululemon in North America, and whether it makes the stock a buy today.
American Express cash back partnership
People using the American Express Platinum card now get a $75 quarterly credit on any purchase made at Lululemon. That is $300 a year, split to every quarter. Not every cardholder is going to use the perk, but I believe it will be highly popular given how easy it is to take advantage of the deal with an online purchase.
American Express does not report exactly how many people have the Platinum card, but estimates project roughly 5 million cardholders or more globally, mainly in the United States. If 3 million Platinum card owners use the Lululemon perk every quarter, that would equate to $900 million in revenue for Lululemon. Of course, Lululemon is likely giving American Express a large kickback itself to be a part of the Platinum ecosystem, but it is a great way for the brand to drive adoption from wealthier customers.
Lululemon could use the boost to growth in North America, even if it takes a margin hit on these Platinum card cash back purchases. The company's United States revenue was $6.5 billion in the last 12 months and has barely grown in recent quarters. So $900 million in potential new revenue -- or somewhere in that ballpark -- could help Lululemon accelerate revenue growth in the important North American retail market again.
Pushing growth abroad
North America has been a weak growth region for Lululemon in recent quarters. Fortunately, it has been doing much better internationally.
In China, Lululemon's revenue grew 24% year over year in constant currency, while the rest of the world (everything excluding North America and China) grew 15% year over year. Revenue from outside of North America is now closing in on $3 billion compared to under $1 billion back in 2020. This has been a huge growth driver for Lululemon and should continue to be in the near future. The company has plenty of room to keep expanding in China while also making inroads into areas like Europe, where it is opening flagship stores in places like Milan.
Combined with the Platinum card refresh and a better product lineup, Lululemon's consolidated revenue growth of 7% should accelerate over the next 12 months.
Is Lululemon stock cheap?
As the business has slowed down and struggled in North America, Lululemon's stock price has faltered. Shares are down 66% from highs as of this writing on Sept. 26, 2025.
Does that make the stock cheap on a revenue growth turnaround? Potentially. With a market cap of $20 billion, Lululemon now trades at a price-to-earnings ratio (P/E) of 11.7, which is only around a third of the S&P 500 Index average of over 30, indicating huge investor concern in regards to its future growth for both revenue and earnings.
Upcoming product innovations, the Platinum card partnership, and continued international expansion should keep Lululemon's business growing, likely much faster than Wall Street is expecting today. This makes the stock an easy buy for investors after its recent drawdown.
