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In the latest close session, Lululemon (LULU - Free Report) was down 2.8% at $113.37. This move lagged the S&P 500's daily loss of 0.14%. On the other hand, the Dow registered a loss of 0.01%, and the technology-centric Nasdaq decreased by 0.57%.

The athletic apparel maker's shares have seen an increase of 7.08% over the last month, surpassing the Consumer Discretionary sector's loss of 2.38% and the S&P 500's gain of 0.25%.

Analysts and investors alike will be keeping a close eye on the performance of Lululemon in its upcoming earnings disclosure. The company is forecasted to report an EPS of $1.79, showcasing a 42.26% downward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $2.47 billion, down 2.26% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $10.94 per share and revenue of $11.08 billion, which would represent changes of -17.5% and -0.22%, respectively, from the prior year.

Any recent changes to analyst estimates for Lululemon should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.77% lower. Lululemon currently has a Zacks Rank of #5 (Strong Sell).

Looking at its valuation, Lululemon is holding a Forward P/E ratio of 10.66. This denotes a discount relative to the industry average Forward P/E of 16.34.

It's also important to note that LULU currently trades at a PEG ratio of 3.82. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Textile - Apparel was holding an average PEG ratio of 2.28 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 172, putting it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Posted by Defense World Staff on Jul 22nd, 2026

Bank of New York Mellon Corp trimmed its stake in lululemon athletica inc. (NASDAQ:LULU – Free Report) by 10.8% in the 1st quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The institutional investor owned 542,887 shares of the apparel retailer’s stock after selling 65,500 shares during the period. Bank of New York Mellon Corp owned 0.45% of lululemon athletica worth $83,116,000 at the end of the most recent quarter.

Other institutional investors also recently added to or reduced their stakes in the company. Swiss Life Asset Management Ltd boosted its stake in lululemon athletica by 53.1% in the 4th quarter. Swiss Life Asset Management Ltd now owns 68,093 shares of the apparel retailer’s stock worth $14,150,000 after purchasing an additional 23,623 shares in the last quarter. Oppenheimer Asset Management Inc. increased its stake in lululemon athletica by 46.6% during the 4th quarter. Oppenheimer Asset Management Inc. now owns 25,594 shares of the apparel retailer’s stock valued at $5,319,000 after purchasing an additional 8,134 shares in the last quarter. Rayburn West Financial Services LLC acquired a new position in lululemon athletica during the 4th quarter valued at approximately $3,536,000. Gateway Investment Advisers LLC raised its holdings in shares of lululemon athletica by 60.0% in the fourth quarter. Gateway Investment Advisers LLC now owns 45,062 shares of the apparel retailer’s stock worth $9,364,000 after buying an additional 16,901 shares during the last quarter. Finally, MUFG Securities EMEA plc raised its holdings in shares of lululemon athletica by 9,695.1% in the fourth quarter. MUFG Securities EMEA plc now owns 204,424 shares of the apparel retailer’s stock worth $42,481,000 after buying an additional 202,337 shares during the last quarter. Institutional investors own 85.20% of the company’s stock.

Analysts Set New Price Targets LULU has been the topic of a number of research analyst reports. BNP Paribas Exane lowered shares of lululemon athletica from a “neutral” rating to an “underperform” rating and set a $88.00 price objective on the stock. in a report on Friday, June 5th. Zacks Research cut lululemon athletica from a “hold” rating to a “strong sell” rating in a research report on Wednesday, June 10th. BTIG Research cut lululemon athletica from a “buy” rating to a “neutral” rating in a research report on Friday, June 5th. Barclays dropped their price target on lululemon athletica from $161.00 to $113.00 and set an “equal weight” rating on the stock in a research note on Friday, June 5th. Finally, Evercore reduced their price objective on lululemon athletica from $175.00 to $130.00 in a research note on Wednesday, June 3rd. One analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating, twenty-four have issued a Hold rating and six have assigned a Sell rating to the stock. Based on data from MarketBeat.com, lululemon athletica presently has a consensus rating of “Reduce” and a consensus price target of $148.35.

Read Our Latest Stock Analysis on lululemon athletica

Insider Transactions at lululemon athletica In related news, Director Charles V. Bergh bought 4,275 shares of the company’s stock in a transaction dated Monday, June 15th. The shares were acquired at an average price of $117.05 per share, for a total transaction of $500,388.75. Following the completion of the transaction, the director directly owned 10,365 shares in the company, valued at $1,213,223.25. This trade represents a 70.20% increase in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 0.54% of the stock is currently owned by insiders.

lululemon athletica Stock Performance Shares of NASDAQ LULU opened at $116.63 on Wednesday. The company’s fifty day moving average price is $119.19 and its 200 day moving average price is $152.76. lululemon athletica inc. has a 1 year low of $104.44 and a 1 year high of $226.24. The company has a market capitalization of $13.84 billion, a PE ratio of 9.41, a price-to-earnings-growth ratio of 3.82 and a beta of 0.88.

lululemon athletica (NASDAQ:LULU – Get Free Report) last posted its earnings results on Thursday, June 4th. The apparel retailer reported $1.69 EPS for the quarter, beating analysts’ consensus estimates of $1.67 by $0.02. lululemon athletica had a return on equity of 31.26% and a net margin of 13.03%.The firm had revenue of $2.47 billion for the quarter, compared to analysts’ expectations of $2.44 billion. During the same period last year, the firm earned $2.60 EPS. The company’s quarterly revenue was up 4.3% on a year-over-year basis. lululemon athletica has set its FY 2026 guidance at 10.950-11.150 EPS and its Q2 2026 guidance at 1.760-1.810 EPS. On average, equities analysts expect that lululemon athletica inc. will post 10.94 EPS for the current year.

lululemon athletica Profile (Free Report)

lululemon athletica inc. is a design-focused athletic apparel company known for performance-oriented apparel, footwear and accessories. The company’s product portfolio centers on technical apparel for yoga, running, training and everyday active lifestyle use and includes tops, bottoms, outerwear, underwear, bags and a growing footwear assortment. lululemon emphasizes fabric science and product innovation, marketing garments that blend performance features with lifestyle styling.

Products are developed in-house and produced through a network of third-party manufacturers.

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Activewear company Lululemon has invested in the $30 million Series A round raised by Syntetica, a French startup that developed a novel approach to recycling nylon, whose properties make it both too good to give up but hard to reuse.

Syntetica promises to recycle two types of nylon — Nylon 6 and Nylon 6,6 — that can’t easily be sorted out from each other in the textile waste collected from consumers, its CEO Marco Bertone told TechCrunch.

With tons of clothing ending up in landfills each year, one key reason for the fashion industry to invest in more circularity is customer perception, especially for premium apparel brands. Startups like Syntetica also benefit from regulatory tailwinds, and from recent price volatility that unusually affected nylon.

In the last six months, geopolitical turmoil in the oil industry has led to quarterly or weekly nylon price renegotiations, Bertone said. “It’s been a wake-up call to many brands that have been relying on petrol-sourced nylon and petrol-sourced synthetics for pricing and convenience, and which today have seen massive shocks to their system.”

According to Bertone, this is a good fit for Syntetica’s pragmatic approach. “We have built the company with the clarity that there’s no green premium. That if you want to scale real solutions for a sustainable world, it needs to be cost competitive, highly scalable, and you need to build partnerships from the very start.”

The startup’s partners include brands like Lululemon, but also Victoria’s Secret and Etam, with a recycling project that could go to market early next year. Syntetica’s Series A was also backed by a large apparel manufacturer, MAS Holdings — “a recognition of how significant the problem has become,” Bertone said.

It is indeed quite unusual for a supply chain actor to invest in a player that hasn’t scaled yet. But before its Series A, Syntetica had already closed a partnership with Michelin’s Centre for Sustainable Materials to establish a commercial demonstration facility in the industrial company’s French hometown, Clermont-Ferrand.

Unlike other startups in its field, Syntetica won’t produce textile itself, let alone a novel material. The product of its recycling process will be pellets, which can then be used by others to make yarn for the likes of MAS. “It’s a story of pragmatic industrial partnerships with the right players to get buy-in from the whole value chain,” Bertone said.

With a background in fashion and second-hand e-commerce, Bertone is the business guy at Syntetica. But through Entrepreneur First’s matchmaking-style accelerator hosted at Paris campus Station F, he teamed up with chemistry researcher Louis Monsigny. The duo then cemented their collaboration in Reims, where they made use of AgroParisTech’s lab. 

Since then, they have also hired a CTO, Ash Ward, who previously worked for failed battery company Northvolt, whose cofounder Peter Carlsson is also one of Syntetica’s advisors. For Bertone, their scars and first-hand experience with the ups and downs of scaling give them experience on when and where to take risks. 

“As a startup, we have to be comfortable taking more risks than industrials; otherwise, there would be no innovation. But there’s also a line— when you parallelize too many risks, then it can become complex,” he said. That’s also why Syntetica isn’t diversifying just yet. 

Although it could eventually recycle other materials or serve other industries, its focus is on using its funding to demonstrate its ability to produce hundreds of tons of pellets per year and deliver them to clients in the clothing supply chain. After that, Bertone said, “Syntetica will be building facilities around the world, close to waste sources and close to textile production.”

While it has global ambitions, the startup benefits from being based in France. Its Series A was led by the Ecotechnologies 2 fund managed by the Green Venture team at Bpifrance, France’s public investment bank as part of the France 2030 plan. It has also received support from the European Innovation Council (EIC) with equity, grants and via its acceleration program.

For these public backers, startups like Syntetica are part of a broader plan to strengthen Europe’s industrial capabilities while reducing reliance on fossil fuels. But the startup also hopes to generate returns, and is also backed by private investors including EQT Ventures, SWEN Capital Partners and family offices.

Syntetica has competitors, too — some using an enzymatic approach to “eat” plastics, but also chemical giant BASF, which developed recycled nylon. Still, after attending industry events, Bertone hopes they will all grow. “If everyone were to scale to tens of factories, we still wouldn’t solve this problem,” he said. “Everyone needs to succeed for us to succeed as a society.”

Lululemon has also invested in other textiles recycling startups such as Epoch Biodesign and Samsara Eco.

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

Anna Heim is a writer and editorial consultant.

You can contact or verify outreach from Anna by emailing annatechcrunch [at] gmail.com.

As a freelance reporter at TechCrunch since 2021, she has covered a large range of startup-related topics including AI, fintech & insurtech, SaaS & pricing, and global venture capital trends.

As of May 2025, her reporting for TechCrunch focuses on Europe’s most interesting startup stories.

Anna has moderated panels and conducted onstage interviews at industry events of all sizes, including major tech conferences such as TechCrunch Disrupt, 4YFN, South Summit, TNW Conference, VivaTech, and many more.

A former LATAM & Media Editor at The Next Web, startup founder and Sciences Po Paris alum, she’s fluent in multiple languages, including French, English, Spanish and Brazilian Portuguese.

If a stock is down 50%, it would need to double to just get back to where it was before its decline. It's a tall task, but it also demonstrates just what kind of upside a beaten-down stock could have if it's able to get back to where it was after a sell-off.

The big question, of course, is whether it can recover, because declines like that don't just happen for no reason. Lululemon Athletica (LULU 2.37%) has lost almost that much during just the first six months of the year. At the mid-way point, it was down an incredible 45%.

With the company in the midst of a CEO transition, could it be worth taking a chance on this struggling apparel stock?

Image source: Getty Images.

The business faces a tough road ahead The problem with Lululemon's business is simple to explain, but hard to fix. The growth has virtually evaporated for this once-top growth stock. When it reported earnings last month, the company's comparable growth rate on a constant-dollar basis was just 2%. That's a far cry from what it used to generate in the past, when double-digit growth was not a problem at all.

The fix, however, is by no means easy. New CEO Heidi O'Neill is taking over in September and has decades of experience at another apparel company that's recently been struggling, Nike. Lululemon's trendy products are not as trendy anymore. Part of it may be due to consumers pushing back on high-priced items, a rise in competition (particularly from online retailers), or both. That's why fixing the issue isn't going to be easy, regardless of who's in charge.

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The stock is cheap, but it comes with plenty of uncertainty Lululemon's stock is at multi-year lows. It's around the levels it was at in 2018. And it's trading at just nine times its trailing earnings. However, even that's not enough to convince investors that it's worth buying, because there are serious concerns about how competitive it may be in the long run, and whether what's worked for it in the past will be able to work in the future.

There's virtually no reason to expect a turnaround for the stock in the second half, as it can take years for a new CEO to fix a struggling business, and even then, it's not a guarantee. Nike's new CEO has been trying to turn the business around for almost two years, and it's hard to make the case that it's in much better shape today. The problems go much deeper than what management may be able to control, and that's why I wouldn't expect Lululemon's stock to turn around anytime soon, and things could still get worse before they get better.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.

Lululemon (LULU - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this athletic apparel maker have returned +3.7%, compared to the Zacks S&P 500 composite's -0.9% change. During this period, the Zacks Textile - Apparel industry, which Lululemon falls in, has gained 2.8%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Lululemon is expected to post earnings of $1.79 per share, indicating a change of -42.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -33.7% over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $11.14 points to a change of -16% from the prior year. Over the last 30 days, this estimate has changed -9.3%.

For the next fiscal year, the consensus earnings estimate of $11.87 indicates a change of +6.6% from what Lululemon is expected to report a year ago. Over the past month, the estimate has changed -11%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Lululemon is rated Zacks Rank #5 (Strong Sell).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For Lululemon, the consensus sales estimate for the current quarter of $2.47 billion indicates a year-over-year change of -2.2%. For the current and next fiscal years, $11.09 billion and $11.46 billion estimates indicate -0.1% and +3.4% changes, respectively.

Last Reported Results and Surprise HistoryLululemon reported revenues of $2.47 billion in the last reported quarter, representing a year-over-year change of +4.3%. EPS of $1.69 for the same period compares with $2.6 a year ago.

Compared to the Zacks Consensus Estimate of $2.43 billion, the reported revenues represent a surprise of +1.59%. The EPS surprise was +1.2%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Lululemon is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Lululemon. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term.

Even in what appears to be a frothy market environment, investors can find beaten-down stocks to analyze. For instance, shares in this apparel company recently traded at a gut-wrenching 78% off their record from December 2023 (as of June 29).

But it wasn't always this way. This consumer discretionary stock soared 321% in the five-year run leading up to that peak.

Here's one reason you might want to consider buying shares today.

Image source: Getty Images.

Lululemon Athletica  (LULU +1.94%) has done a fantastic job losing the market's conviction. The stock has gotten so crushed that the valuation is hard to ignore now. Investors can buy shares at a forward price-to-earnings ratio of just 10.6, less than half the S&P 500 index's multiple.

Lululemon's growth has weakened dramatically. Revenue increased 4% in the first quarter of fiscal year 2026 (ended May 3), with sales in the critical U.S. market down 4%, likely due to a combination of competitive forces, disappointing product releases, and inflationary pressures.

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The rational perspective, after learning that the stock has lost three-fourths of its value, is that this is a dying business. That's not true.

Lululemon still reports robust profitability, with a gross margin of 54.2% last fiscal quarter. Its brand name, known for premium merchandise, is a key competitive advantage. And it possesses long-term growth potential, especially in China.

If you're a patient investor willing to hold for five years or longer, Lululemon deserves some attention.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.

SHENYANG, CHINA - JUNE 13: Hundreds of yoga enthusiasts practice yoga at the Sun Square of Shenyang Grand Theatre on June 13, 2026 in Shenyang, Liaoning Province of China. (Photo by Cai Jingyu/VCG via Getty Images)

VCG via Getty Images

At a May 30 promotional event on the Great Wall of China, the company featured a giant Japanese taiko drum instead of a culturally appropriate Chinese dagu drum for a musical performance. The misstep immediately sparked backlash for cultural insensitivity and drew over 50 million views on Weibo—other Western brands, including H&M, Dolce & Gabbana, Dior, Burberry, and Gucci, have been caught in similar cultural crosshairs.

It took Lululemon over two weeks to acknowledge the mistake and issue an apology on Weibo, pledging its commitment to honoring Chinese culture—a critical priority for Western brands doing business in China—and accepting responsibility for an inadequate planning and review process.

As global communications firm Edelman said, “Trust is the currency of consumer power,” and another misstep gives loyal customers an excuse to leave the brand and potential customers a reason to look elsewhere—something Lululemon can ill afford now as its business growth slows, leadership is in transition and its stock price is down 50% this year.

Plagued By ControversiesControversies have haunted Lululemon almost from the beginning in 1998 under founder Chip Wilson. He explained that the company name with multiple L’s was originally chosen because it was a letter that Japanese people couldn’t pronounce. “It’s funny to watch them try to say it,” he infamously said.

He later walked it back later by saying the name is “innately North American and authentic” because the letter L does not exist in Japanese phonetics. The Chinese drum controversy recalled those remarks, reinforcing the perception that Lululemon still struggles with cultural awareness.

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Wilson continued to make highly controversial remarks throughout his tenure with the company, which officially ended in 2015. Though as the company’s single largest shareholder, he has persisted in speaking out publicly against leadership’s decisions, most recently in his proxy battle to get his chosen picks on the board.

Back in the day, Wilson defended not offering clothing for plus-sized women because such larger sizes were too expensive to make and he blamed excess pilling in some designs because women were wearing the clothing wrong or had a body shape that wasn’t suitable to its designs.

Beyond such insensitive remarks, the company had a major quality issue in 2013 after widespread complaints emerged that its yoga pants were too sheer. That led to millions of yoga pants being recalled and a reputational crisis for the brand.

Lululemon was hit with further complaints about sheerness in its Align leggings in 2021 and again in 2025. Early this year is got the same complaints for its Get Low leggings, causing the company to temporarily halt online sales. Plus, in 2024, the Breezethrough leggings were pulled for quality issues.

It also was caught making false claims about the health benefits of products made with seaweed-infused fabrics. In 2007, the Canada’s Competition Bureau ruled the company’s claims of anti-inflammatory, detoxifying qualities in its Vitasea product line were unsubstantiated, false and misleading and forced the company to remove all such health benefit claims from its advertising and marketing.

And most recently, in April, the Texas Attorney General Ken Paxton has launched an investigation into Lululemon’s use of PFAS, so-called “forever chemicals” that don’t break down in the environment and may have negative health effects. The company claims it phased out use of the substances in early 2024 and is cooperating with the state. However, it’s one more black eye against the company.

Taken together, these controversies suggest a pattern that Lululemon has never fully put behind it. They invite debate about whether the most recent missteps will quickly fade from memory or if they deepen a persistent trust problem for the brand.

Clouds Of UncertaintyThe general consensus is that the latest China misstep will leave no permanent damage. BNP Paribas analyst Laurent Vasilescu said, “The push back tends to be a short-term headwind.” And RepTrak’s Stephen Hahn noted any reputational damage will remain confined to the local market and have no long-term impact globally. “This story is less likely to drum up any major reputational noise about Lululemon outside of China.”

However, the China drum incident, paired with the Texas AG’s PFAS investigation, reopens the question of whether Lululemon is a brand consumers can trust. It refreshes memories of past controversies and casts the company once again in a negative light.

Notably, during the first-quarter earnings call, the company acknowledged it experienced “spikes of negative commentary” in the media and across social media—including in China where brand momentum slowed after a strong Chinese New Year. And that was before the Great Wall of China fiasco, casting a cloud over second-quarter results, potentially even beyond.

Customer trust is the key metric. Edelman’s global research among 15,000 consumers in 15 countries found 88% rank trust equally important to “ best quality” and “good value for the money” when making a purchase decision. Lululemon is challenged on all counts—quality questions persist, value is threatened amid rising prices and trust shaken by cultural missteps and regulatory scrutiny.

GlobalData retail analyst and managing director Neil Saunders told CBS News earlier this year that Lululemon’s products have become “junkified,” adding, “What it suggests is that there’s kind of a lack of quality control, there’s a lack of care, there’s a lack of attention to detail.”

Reasons To FleeConsumers have a long memory when controversies around a brand’s cultural sensitivity and product quality issues resurface again and again—a memory that shapes how they interpret its latest controversies and could drive them to look elsewhere. And unlike in Lululemon’s early days, the competition is coming on strong.

Privately-held Vuori has reached a market cap of $5.5 billion valuation after a recent investment round. It’s on a path to 100 global stores, including five just opened in China, and an IPO is rumored to be in the works.

Alo Yoga has about 130 stores globally, with plans to open a 7,000-square-foot, two-story Hong Kong waterfront store shortly. Forbes estimates that Alo Yoga’s parent company, Color Image Apparel, has generated nearly $2 billion most recently.

And heavy-hitter Nike entered the premium women’s activewear market in a collaboration with Kim Kardashian’s SKIMS brand last year, with the NikeSKIMS product line expanding globally this year.

The irony is that Lululemon, a brand that once defined the athleisurewear category, opened the door for these and other challengers while being distracted by controversies of its own making.

And hanging over all of this is Chip Wilson’s highly-publicized proxy battle where he was characteristically outspoken about the company’s leadership mistakes and claims that Lululemon has “lost its cool.”

Eroding TrustBefore the China drum backlash, Lululemon was guiding on a net revenue decline between 2%-3% in the second quarter, after squeaking out 4% revenue growth in the first quarter. In the latest earnings call, the company acknowledged headwinds as it entered the second quarter around negative publicity—e.g. Wilson’s critiques and the Texas PSFA investigation—and recent product launches that didn’t “generate anticipated guest response,” such as the alleged see-thru Get Low leggings.

These remarks came before the China controversy, which is likely to hit the company’s sales harder than its earlier guidance suggests. Noting that momentum is slowing in China—comparable sales slipped from 30% in fourth quarter 2025 to 20% in first quarter 2026—BNP Paribas warned, “We are worried that China revenues will flatten out,” as it also expressed concerns about Lululemon’s continued decline in North America—the Americas comparable sales dropped 5% in first quarter. And the firm noted this was before the full impact of the two recent social media controversies are factored into results.

The last thing Lululemon needs now is further erosion of consumer trust and while the particulars of the latest controversies will fade, more general negative feelings about the brand are likely to persist, adding fuel to the competition’s fire.

If trust continues to slip, the question won’t be if Lululemon can regain momentum with new product drops and marketing initiatives, but whether consumers will continue to give the brand the benefit of the doubt.

See Also:

ForbesLululemon Controversy In China Threatens Growth In Key MarketBy Mary Whitfill RoeloffsForbesLululemon Founder Chip Wilson Wins Two Board Seats To End Bitter Proxy BattleBy Pamela N. DanzigerForbesLululemon's Billionaire Founder Has Been Fighting To Oust Its CEO–He Won, But He’s Still Not HappyBy Simone Melvin

Lululemon Athletica Inc (NASDAQ:LULU) shares rose more than 3% after shareholders approved three management-backed directors at the company’s June 25 annual general meeting, helping resolve a prolonged proxy dispute with founder Chip Wilson.

The elected directors include former Levi Strauss CEO Chip Bergh, Unilever executive Esi Eggleston Bracey and finance veteran Teri List. Their appointment strengthens the board as the company prepares for incoming CEO Heidi O’Neill, who is set to take over in September.

Lululemon also confirmed that two of Wilson’s nominees, former On co-CEO Marc Maurer and former ESPN chief marketing officer Laura Gentile, have also joined the board as independent directors.

A third mutually agreed director is expected to be added by October 1, expanding the board to 11 members.

The changes follow a settlement reached in May aimed at ending months of public tension between Wilson, who owns about 8.6% of the company, and Lululemon’s leadership.

Under the agreement, Wilson has also committed to an 18-month period of refraining from public criticism of the company.

Lululemon has struggled amid intensifying competition from rivals such as Alo Yoga and Vuori, with the stock down about 50% in the last 12 months.

Lululemon Athletica: Assessing Its Seasonal Revenue CycleLululemon Athletica (LULU 0.24%) primarily generates revenue by designing and selling athletic apparel, footwear, and accessories directly to consumers and through its global network of retail locations.

While expanding its footprint by opening a new physical retail store in Greece in May 2026, it reported 8% net income margin for the quarter ended May 3, 2026.

Nike: Maintaining Consistency at Massive ScaleNike (NKE 2.56%) earns its revenue by designing, marketing, and distributing athletic footwear, apparel, and equipment worldwide through specialized retail outlets, digital channels, and independent distributors.

It declared a quarterly cash dividend for shareholders on May 4, 2026, and it reported 5% net income margin for the quarter ended Feb. 28, 2026.

Why Revenue Matters for Retail InvestorsTracking revenue helps investors understand exactly how much money a business is generating from its core sales activities before any operating expenses or taxes are deducted. Understanding this top-line figure allows investors to measure a company's total customer sales volume and baseline growth trajectory over time.

Quarterly Revenue for Lululemon Athletica and NikeQuarter (Period End)Lululemon Athletica RevenueNike RevenueQ3 2024$2.4 billion (period ended July 2024)$11.6 billion (period ended Aug. 2024)Q4 2024$2.4 billion (period ended Oct. 2024)$12.4 billion (period ended Nov. 2024)Q1 2025$3.6 billion (period ended Feb. 2025)$11.3 billion (period ended Feb. 2025)Q2 2025$2.4 billion (period ended May 2025)$11.1 billion (period ended May 2025)Q3 2025$2.5 billion (period ended Aug. 2025)$11.7 billion (period ended Aug. 2025)Q4 2025$2.6 billion (period ended Nov. 2025)$12.4 billion (period ended Nov. 2025)Q1 2026$3.6 billion (period ended Feb. 2026)$11.3 billion (period ended Feb. 2026)Q2 2026$2.5 billion (period ended May 2026)Not yet reportedData source: Company filings. Data as of June 23, 2026.

Foolish TakeBoth Lululemon and Nike show a trend of revenue spikes in one quarter. For Lululemon, that’s the first quarter, which is the company’s fiscal fourth quarter and encompasses the key winter holiday shopping time. Nike’s sales jump up in Q4, its fiscal second quarter, also due to overlap with the holiday shopping season which includes Black Friday.

This pair of athletic apparel companies are facing a challenging period. Lululemon is changing CEOs and reduced its 2026 sales outlook to be flat compared to 2025. Nike’s $11.3 billion in revenue for its fiscal Q3 ended Feb. 28 was flat year over year. This situation has led to both stocks dropping near 52-week lows.

For investors weighing whether to buy shares in Lululemon or Nike, the former has shown more quarters with year-over-year sales growth although the arrival of a new CEO, Heidi O’Neill, won’t be until September, injecting uncertainty into future revenue potential.

Nike’s advantage is that it pays a dividend, currently yielding a robust 3.9%. It has a track record of increasing dividend payouts for 24 consecutive years.

It's not often that a yoga festival becomes a stock market story, but that's exactly what’s happening to Lululemon Athletica Inc NASDAQ: LULU right now. The activewear giant arranged a large-scale promotional event on a section of the Great Wall of China near Beijing in late May, complete with thousands of attendees, Chinese celebrities, and what was meant to be a traditional drum performance. The trouble is that the drum used reportedly wasn't Chinese at all. It was Japanese, and Chinese social media has not been gentle about it.

lululemon athletica Today

LULU

lululemon athletica

$111.81 +2.89 (+2.65%)

As of 11:44 AM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$104.44▼

$252.24P/E Ratio9.03

Price Target$152.88

The backlash on the Chinese social media platform Weibo has been substantial, with the related discussion topping tens of millions of views, and the company forced to issue an apology. Considering that China has been one of the most important growth markets for Lululemon over the past few years, this is the absolute last thing the stock needed. The shares were already deep in the doghouse, and a public misstep like this only deepens the sense that everything that could be going wrong for Lululemon is.

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However, for those who can step back and look at the bigger picture, this might be exactly the kind of moment that long-term bulls will look back on with a wry smile.

A Stock That's Been Badly Beaten UpThis latest gaffe in China didn't cause the selloff in Lululemon, but it has added to one that's been quietly grinding away since late 2023. Shares are down close to 50% year to date, having hit a fresh low earlier this month, and are trading at roughly the same level as eight years ago.

For a brand that was, not so long ago, one of the great growth stories in consumer retail, that's a stunning reversal of fortune. The interesting part is that this collapse has not been driven by an underlying business that's falling apart. Lululemon has continued to exceed analyst expectations for both earnings and revenue in recent quarterly reports, including its latest earlier this month.

The problem, instead, has been an overall deceleration in growth and consistently soft forward guidance. Each quarter has come with a slightly weaker outlook than the market wanted to hear, and that sense of deceleration is what has truly done the damage. When a stock is priced like a growth name, but then stops growing like one, the re-rating can be brutal.

The Valuation Tells Its Own StoryBut here's where it gets interesting for those willing to look past the noise. Lululemon's price-to-earnings (PE) ratio is currently below 10, the first time it's been at that level in more than a decade. For a profitable, cash-generative, globally recognized brand with a still-growing footprint in some of the world's largest markets, that multiple is starting to feel like a bargain.

Compared with Lululemon's peak valuation, the current valuation is almost unrecognizable. That's not because the business has structurally broken, but because the market has gone from extreme optimism to extreme pessimism. The truth, as is so often the case, is likely somewhere in the middle. And for patient investors, the middle is exactly where the outsized opportunities tend to live.

Even the Cautious Voices Imply UpsideArguably, the most striking point about Lululemon's current setup is what the cautious analysts are saying. Sure, much of the recent commentary has been distinctly downbeat, with some calling the company a "rudderless ship in increasingly choppy seas," and there's a sense that not much will change until the new CEO, Heidi O'Neill, takes the helm in September.

However, even with all of that skepticism baked in, Lululemon's consensus rating of Reduce may not tell the full story. The recently refreshed price targets from the more cautious firms still imply upside from current levels. The likes of Daiwa Securities, Deutsche Bank, and Bank of America, for example, each rate Lululemon a Hold or equivalent and set targets ranging from $120 to $140, comfortably above where the stock is currently trading at around $110. Tie that in with the rock-bottom valuation that the stock’s currently trading at, and you have the kind of setup that's hard to ignore.

lululemon athletica inc. (LULU) Price Chart for Wednesday, June, 24, 2026

A Risk-Reward That's Starting to TiltTo be sure, this still isn't a stock for the faint-hearted. There's a genuine possibility that things could get worse before they get better, particularly if the China headwinds intensify or if O'Neill's arrival sparks further strategic changes that need time to bed in. The market will likely remain unforgiving until there's hard evidence that the deceleration story has finally hit a floor.

But the patience here may eventually be rewarded handsomely. The China gaffe is the kind of headline that scares short-term traders out of a stock and lets long-term bulls quietly begin building positions. While the rest of the market is busy pointing and laughing at a misplaced drum, the smarter money may be paying closer attention to what comes next.

Should You Invest $1,000 in lululemon athletica Right Now?Before you consider lululemon athletica, you'll want to hear this.

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lululemon athletica remains a Strong Buy despite a 50% stock drop and significant underperformance versus the benchmark. LULU trades at a multi-year low 10x forward P/E, a 36% discount to the sector median and well below peers like NKE and DECK. International sales strength and premium margins support the thesis that LULU is undervalued and the recent downtrend is overdone.

Inflation remains a lingering headwind for consumer spending. The latest data shows the producer price index rising 6.5% year over year for May -- the highest increase since 2022. This isn't the news Lululemon Athletica (LULU +0.11%) wanted to hear, as higher prices for everyday essentials leave less money for discretionary items like apparel.

Lululemon's sales growth has slowed over the past two years, which coincides with the spike in inflation that began in the aftermath of the pandemic. The question is whether persistent inflation will continue to pressure its sales and margins, potentially sending the stock to fresh lows in the near term.

Image source: Getty Images.

Weak demand continues to plague Lululemon Lululemon's revenue rose just 2% year over year on a constant-currency basis last quarter. This is well off the pace in mid-2023, when it reported an 18% increase in revenue. Comparable sales from existing stores fell 2% year over year on a currency-adjusted basis.

Weak demand is hurting profitability. Gross margin dropped over four percentage points to 54.2%. Management doesn't see relief in the near term. The company lowered full-year guidance, and is now expecting revenue to be down slightly.

Inflation is a real challenge for the business. Higher prices don't create an environment conducive to growing apparel sales. While Lululemon does have an advantage in operating at the premium end of the apparel market, the dip in gross margin shows it is not benefiting from pricing power. This could indicate increasing competition from other brands.

Adding to the uncertainty is a recent leadership change following Calvin McDonald's January departure as CEO. This was followed by underperforming product launches last quarter and negative social media comments about the brand.

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Is the stock a bargain or a value trap? There is uncertainty and negative sentiment around the stock. While the stock trades at a bargain valuation of just 11 times forward earnings estimates, I would wait before buying.

The change in leadership adds to the uncertainty around Lululemon's product strategy, which has already shown mixed results. While some product updates have received positive customer response, recent releases haven't translated into sales growth in other products as management expected.

While international revenue grew 22% year over year last quarter, negative brand sentiment has hit the American segment hard, resulting in a 4% year-over-year decline.

Heidi O'Neill, who previously worked at Nike for over 25 years, will join Lululemon as the new CEO on Sept. 8, 2026. Until then, there's no catalyst for a product strategy shake-up to reignite demand.

Lululemon could turn out to be a bargain at these levels, but it could also be a value trap. Beyond the near-term inflation headwinds, the uncertainty around the company's product strategy doesn't provide a clear path for improving sales anytime soon. I would wait until the new CEO comes on board later this year before considering a position in the stock.

Lululemon has issued a public apology for using a Japanese drum during a promotional yoga event staged on China’s Great Wall, which triggered a social media firestorm.

The Canadian athleisure company said it failed to show cultural sensitivity for the event, which was held at the end of May and featured Chinese actor Zhu Yilong.

Critics said the instrument used at the event resembled a Japanese taiko drum, a barrel-shaped percussion instrument traditionally played with large sticks in ensemble performances.

Chinese actor Zhu Yilong appeared at Lululemon’s Great Wall yoga festival, which sparked backlash over the use of a Japanese drum during a performance. The Chinese dagu, which was not used, is a broad category of traditional Chinese drums with distinct designs and performance styles.

“Due to limitations in our professional knowledge, we were unable to identify potential controversies,” Lululemon said.

It also said it “should have been more cautious and thorough,” and has removed “all related promotional content.”

While Lululemon did not specify the drum’s origin, the company emphasized that the event was intended to celebrate Chinese culture.

“We deeply value the feedback received and recognize that we should have been more thoughtful and sensitive in our planning and review process for the drum performance,” the statement continued.

“This has been a valuable learning for us, and we extend our sincerest apologies.”

The backlash reflects longstanding sensitivities in China toward Japanese cultural symbols, which can quickly become flashpoints online amid lingering tensions between the two countries.

More than 2,000 people attended Lululemon’s yoga festival at the Great Wall in late May, an event that later ignited a cultural controversy in China. China News Service via Getty Images As a result, symbols perceived as Japanese often draw heightened scrutiny in China, particularly during high-profile cultural events.

In a statement posted on Weibo, one of China’s largest social media platforms, Lululemon apologized to both Zhu and the public after criticism spread online.

The controversy erupted after online commentators questioned the origin of the drum used during the Great Wall event.

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The issue gained wider attention after percussionist Xu Yang published a video analyzing the instrument, drawing additional scrutiny to the performance.

Crisis communications strategist Amore Philip said Lululemon’s apology was timely but may not fully address concerns in China.

“The speed was right. The language was wrong,” Philip told The Post, arguing that the company’s explanation that it lacked sufficient expertise risked making it appear “incompetent rather than accountable.”

Lululemon’s high-profile Great Wall activation was intended to celebrate Chinese culture but instead sparked an online backlash. China News Service via Getty Images Philip described the backlash as “a warning shot, not a death blow” for Lululemon’s China business, noting that the market remains one of the company’s fastest-growing regions.

The Great Wall controversy is the latest in a string of public-relations headaches for Lululemon.

Earlier this year, the company faced criticism after shoppers complained that its “Get Low” leggings were see-through, prompting a temporary sales pause and a 6.5% drop in its share price.

In 2024, Lululemon pulled its “Breezethrough” leggings after customers mocked the design online, while founder Chip Wilson sparked backlash the same year with comments criticizing the company’s DEI efforts.

The athleisure giant removed promotional content tied to its Great Wall event following a social media firestorm in China. Jimin Kim/SOPA Images/Shutterstock Foreign brands operating in China and elsewhere often come up against cultural and political sensitivities that can quickly become flashpoints on social media.

Diplomatic tensions between China and Japan have also been running high in recent months. Beijing sharply criticized Japanese Prime Minister Sanae Takaichi after comments suggesting a Chinese attack on Taiwan could pose a direct threat to Japan’s security.

Chinese officials accused Tokyo of interfering in its internal affairs, while the remarks fueled concerns in Beijing that Japan was taking a more confrontational stance toward its regional rival.

Lululemon is not the first global brand to stumble into a cultural controversy in Asia.

Earlier this year, Starbucks apologized in South Korea after a marketing campaign was accused of invoking symbols associated with the 1980 Gwangju uprising, triggering a public backlash and the departure of a senior executive.

Last year, outdoor apparel brand Arc’teryx faced an online backlash after holding a fireworks event in Tibet.

The Post has sought comment from Lululemon.

As consumer spending shifts between high-end physical goods and live experiences, investors are weighing the merits of Lululemon Athletica (LULU +0.11%) and StubHub (STUB +2.46%) to determine which better fits their portfolio.

Lululemon remains a leader in technical apparel, while StubHub operates as a massive global intermediary for the live events industry. Both companies cater to discretionary spending but face vastly different operational challenges in 2026.

The case for Lululemon AthleticaLululemon Athletica designs and sells technical athletic apparel and footwear for activities such as yoga and workouts. The company operates an omni-channel model, reaching customers through more than 800 stores and a robust e-commerce platform. It relies on a concentrated network of suppliers, with roughly 40% of production in Vietnam and 34% of fabric sourced from Taiwan.

In its 2025 fiscal year (FY), revenue reached $11.1 billion, representing a growth rate of 4.9% compared to the previous year. The company reported net income of $1.6 billion for the same period. While its net margin was approximately 14.2%, this was a decrease from the 17.1% net margin achieved in the prior fiscal year.

As of its February 2026 balance sheet, the debt-to-equity ratio was 0.4x. This ratio measures total debt against shareholder equity, suggesting a conservative level of borrowing. The current ratio, which compares short-term assets to short-term liabilities, was a healthy 2.3x. Additionally, the company generated free cash flow of $921.7 million, which is the cash remaining after paying for retail stocks operations and equipment.

The case for StubHubStubHub operates a global marketplace that connects buyers and sellers of tickets for live sports, music, and theater events. The company generates revenue by collecting service fees on these transactions across its North American and international platforms. It serves a diverse customer base in over 200 countries, though it faces unique branding restrictions in certain international markets.

For the period ending in FY 2025, the company reported revenue of $1.7 billion, a slight decline of 1.4% from the prior year. The business recorded a net loss of approximately $2.0 billion during this timeframe. This resulted in a net margin of -109.2%, primarily due to high expenses and legal settlements that weighed on the bottom line.

As of the December 2025 balance sheet, the debt-to-equity ratio stood at 0.8x. The current ratio was approximately 1.0x, indicating that short-term assets just barely cover short-term obligations. Despite the reported net loss, StubHub generated free cash flow of $191.2 million, representing the actual cash produced by the business after accounting for necessary capital investments.

Risk profile comparisonLululemon Athletica faces significant supply chain risks due to its heavy reliance on manufacturing in Vietnam and fabric sourcing in Taiwan. This geographic concentration leaves the company vulnerable to regional geopolitical tensions or trade disruptions. Furthermore, the company is navigating a leadership transition following a CEO departure in early 2026 and faces stiff competition from Nike and other brands selling lower priced alternatives.

StubHub is currently dealing with intense regulatory scrutiny following a $10 million settlement with the FTC regarding fee transparency. The company also disclosed material weaknesses in its internal controls, which could impact the accuracy of future financial reporting. Operationally, it depends on third party cloud services, while facing competition from primary ticket sellers like Live Nation Entertainment.

Valuation comparisonLululemon Athletica appears to be the more value-oriented choice based on future earnings estimates, while StubHub carries a significantly higher multiple despite its recent net losses.

MetricLululemon AthleticaStubHubSector BenchmarkForward P/E10.5x23.2x29.6xP/S ratio1.2x2.3xSector benchmark uses the SPDR XLY sector ETF. Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Choosing an investment between Lululemon Athletica and StubHub is a tough decision since both are at interesting crossroads in their businesses.

Lululemon is experiencing a tough time. It reduced its 2026 sales outlook to be flat compared to 2025. A day after this announcement, its stock plunged to a 52-week low of $109.36.

Another factor weighing on the stock is Lululemon’s leadership transition. Uncertainty clouds the company as it awaits a new CEO, Heidi O’Neill, who won’t start until September. Whether she will be able to turn around the struggling retailer will be an unknown until she’s at the helm for a couple of quarters at least.

While StubHub showed no sales growth in 2025, it’s off to a strong start in 2026. Its first-quarter revenue rose 12% year over year to $446.0 million. Moreover, the company swung from a Q1 net loss of $22.2 million in 2025 to net income of $48.0 million this year. Its solid Q1 earnings report helped push shares up from 52-week low of $5.74 reached in April.

Lululemon is the established business, since StubHub only became a public company last September. However, StubHub appears to be heading towards a promising year ahead given its Q1 sales growth. Because of this, my choice right now is StubHub, although investors who believe Lululemon can turn things around will find now is a good time to pick up shares due to its low valuation.

Lululemon Athletica LULU is back under pressure in China after a yoga event on the Great Wall turned into a reputational headache. The late-May gathering brought more than 2,000 participants to one of China's most symbolic landmarks, but the use of a Japanese taiko drum quickly drew backlash across Chinese social media.

The company said the event was meant to honor Chinese culture, but it also admitted the drum performance should have gone through a more thoughtful and sensitive planning process. Lululemon apologized, calling the criticism a valuable learning moment, at a time when the brand is already navigating sharper scrutiny in one of its most important growth markets.

For investors, the bigger issue is not just one event. Lululemon shares have fallen about 46% so far this year after the company cut its annual forecast due to weaker North American performance, while China remains a bright spot that could still see slower growth this year. The brand is also facing tougher competition from Chinese and Western rivals, including Alo Yoga's move into the market, while another recent Shanghai yoga campaign drew criticism after participants said they were left practicing in the rain without rain gear or adequate backup facilities.

Imugene Ltd (ASX:IMU, OTC:IUGNF, FRA:ILA) earlier this week highlighted encouraging clinical progress for its Azer-Cel program after presenting new data at the American Society of Clinical Oncology (ASCO) conference in Chicago, one of the world's largest oncology events.

Managing director and CEO Leslie Chong said the company was selected to deliver an oral presentation from among more than 8,500 submissions received by the conference. According to Chong, attendance at the session was strong, with hundreds of participants present and standing-room-only conditions during the presentation.

The data focused on Imugene's cohort two study, which is evaluating Azer-Cel in patients with blood cancers who have not previously received approved CAR-T therapies. Chong reported that responses had been observed across several niche indications, including chronic lymphocytic leukemia (CLL), marginal zone lymphoma and Waldenström macroglobulinemia.

Importantly, Chong said some patients had maintained responses for more than six to seven months. One patient with CLL progressed from a partial response to a complete response after approximately five months, an outcome she noted can be difficult to achieve in that disease setting.

The level of engagement from oncologists, investors and pharmaceutical company representatives suggested growing interest in the program. Chong reported that the presentation generated substantial audience interaction and questions, indicating close attention to the study's findings.

Looking ahead, a key catalyst for Imugene will be continued patient enrolment and follow-up within the CAR-T naïve cohort. Additional durability data could further strengthen the clinical profile of Azer-Cel as more patients remain on study.

Another important catalyst is the company's BTK inhibitor combination program. Chong noted that BTK inhibitors serve a market worth approximately $12 billion annually. The study is investigating whether concurrent treatment with Azer-Cel can improve outcomes and potentially extend the effectiveness of existing therapies.

Chong said the company was "quite excited about the data" and highlighted the enthusiasm of investigators involved in the trial, including Dr Gupta, who presented the results at ASCO.

The conference also provided exposure to major pharmaceutical companies, an audience that could become increasingly relevant as clinical development progresses. While Chong said partnerships are an aspiration for many biotechnology companies, she emphasised the broader objective of delivering therapies capable of improving and extending patients' lives.

With ongoing enrolment, additional clinical updates and progress in combination studies, Imugene appears positioned to generate further news flow as development of Azer-Cel continues.

Key highlights Imugene secured an oral presentation slot at ASCO from among more than 8,500 submissions. Hundreds attended the Azer-Cel presentation, with standing-room-only participation. The company received strong engagement and a high volume of audience questions. Data presented came from the CAR-T naïve cohort in blood cancer patients. Responses were observed across multiple lymphoma and leukaemia indications. Some patients maintained responses beyond six to seven months. One CLL patient progressed from a partial response to a complete response. Imugene continues patient enrolment and follow-up in the ongoing study. The company has commenced treatment in a BTK inhibitor combination study. Management sees potential for both standalone and combination use of Azer-Cel. Pharmaceutical companies attending ASCO showed interest in emerging oncology therapies. Leslie Chong emphasised the company's mission to improve and extend patients' lives.

Proactive: Welcome back to Proactive Investors. I'm your host, Kerry Stevenson. I've asked Leslie Chong to join us again. The last time we spoke, Leslie was preparing to attend the American Society of Clinical Oncology (ASCO) conference in the US. More than 40,000 people attend the event and over 8,500 submissions are made. Imugene was selected to present. Leslie, you're still in Chicago. This is quite an achievement for Imugene. Can you explain what happened?

Leslie Chong: Around 40,000 people attend ASCO. We had hundreds of people attend our presentation. Many companies submit data but only a small number are selected for oral presentations. We were able to showcase Azer-Cel from Imugene, and attendance was so strong that some people had to stand because there were not enough seats. We also received the most questions at the end of the session, which tells me people were paying close attention to our study.

Proactive: What was it that generated so much interest?

Leslie Chong: We presented data from cohort two, our CAR-T naïve niche. These are patients with blood cancers who have not previously received approved CAR-T therapies. The basket study includes diseases such as chronic lymphocytic leukemia, marginal zone lymphoma and Waldenström macroglobulinemia. We are seeing responses across multiple indications. In CLL and marginal zone lymphoma in particular, patients are not only responding but maintaining those responses for six to seven months and beyond. One CLL patient moved from a partial response to a complete response after about five months, which is significant because complete responses are difficult to achieve in this disease.

Proactive: What are the next steps?

Leslie Chong: We will continue following patients and enrolling more participants into the niche indication cohort. We have also announced treatment of the first patient in our BTK inhibitor combination study. BTK inhibitors represent a market worth around $12 billion. If combining Azer-Cel with these therapies can improve outcomes and prolong treatment effectiveness, it could be very meaningful. We are excited about the data, and so are our investigators, including Dr Gupta, who presented the results.

Proactive: What exactly is an investigator?

Leslie Chong: Investigators are independent haematology-oncology specialists who conduct clinical trials on our behalf. They are world-leading oncologists who treat patients using our therapy and scientifically evaluate the asset throughout the study.

Proactive: ASCO attracts major pharmaceutical companies. Is partnering a potential strategy?

Leslie Chong: Partnerships are a goal for many emerging biotech companies. One reason I believe Azer-Cel is attractive is that it has the potential to combine with blockbuster medicines while also becoming a significant product in its own right. There is interest in innovative medicines, and collaborations can help bring treatments to patients more effectively. Whether independently or in combination, our goal is to improve and extend patients' lives.

Proactive: Helping patients is clearly a major motivation for you.

Leslie Chong: It is. Cancer has affected many families, including my own. My father passed away from gastric cancer and my mother is a lung cancer survivor. If we can meaningfully extend lives with Azer-Cel, either alone or in combination therapies, that makes the effort worthwhile. That's what ASCO is all about and why it's so energising to be part of this community.

Proactive: Thank you for joining us. We look forward to another update when you return to Australia.

Leslie Chong: Thank you.

Stocks are set for a lackluster open Friday, after a stronger-than-expected jobs report for May sent bond yields rising and pressured a weakening tech sector. Nonfarm payrolls increased by 172,000 last month, above the 80,000 estimates. At last look, the 10-year Treasury yield cleared 4.5%, as interest-rate hike expectations grew.

Futures on the S&P 500 Index (SPX) are modestly lower, while Dow Jones Industrial Average Index (DJIA) futures have pared a triple-digit gain. Nasdaq-100 Index (NDX) futures are pointed sharply lower, with chip stocks under pressure once more. 

Continue reading for more on today's market, including:

Plus, where the chip selloff spilled, and two retailers brushing off lackluster reports.

5 Things You Need to Know Today The Cboe Options Exchange saw more than 2.8 million call contracts and 1.2 million put contracts traded on Wednesday. The single-session equity put/call ratio fell to 0.77, while the 21-day moving average fell at 0.56.  The chip selloff spilled over into the memory sector, with Micron Technology (NASDAQ:MU) last seen down 3% premarket. Micron stock is stepping further away from Wednesday's all-time high of $1,089.29. Shares of lululemon athletica Inc (NASDAQ:LULU) are plummeting 11.4% before the bell, after the retailer slashed its full-year outlook, overshadowing a top- and bottom-line beat for the first quarter. The company also made a wider-than-expected cut to its earnings guidance. LULU has been struggling on the charts, already having shed 62.7% over the past 12 months. Chipotle Mexican Grill (NYSE:CMG) shares are 1.3% higher in electronic trading, after J.P. Morgan Securities upgraded the chain to "overweight" from "neutral" and hiked its price target to $35 from $32. The burrito maker has shed 23% for the year, though today's move could push the stock away from yesterday's three-year low. Investors will be eyeing key jobs data later this week. 

Asian Markets Suffer Tech Sector Setback Asian markets finished firmly lower on Friday as investors continued to monitor U.S.-Iran tensions. The South Korean Kospi slid 5.5% as tech stocks plunged, taking a cue from their U.S. counterparts. Plus, South Korea's labor minister also called on major tech firms to share more of their booming profits with workers and suppliers, warning that the AI-fueled surge in chip-sector earnings could exacerbate wealth disparities. Japan’s Nikkei and Hang Kong’s Hang Seng fell 1.3% and 1.2%, respectively, while China’s Shanghai Composite shed 0.7%.

European markets are brushing off the chip selloff. The French CAC 40 is leading the gains with a 0.6% rise, while London’s FTSE 100 is up 0.5%, and the German DAX adds 0.2%. The pound is moving higher, set for its third-straight weekly gain against the U.S. dollar. Meanwhile, U.K. Housing prices fell an unexpected 0.1% in May.

Key Takeaways LULU Q1 EPS of $1.69 beat estimates of $1.67; revenues of $2.47B beat estimates of $2.43B.LULU international revenues rose 22% y/y, while Americas revenues fell 3% and comps dropped 5%.LULU cut its FY26 outlook to $11-$11.15B revenues and $10.95-$11.15 EPS as margin pressure builds. lululemon athletica inc. (LULU - Free Report) delivered first-quarter fiscal 2026 results, wherein revenues and earnings per share (EPS) surpassed the Zacks Consensus Estimate. The company delivered year-over-year top-line growth, supported by strength in its international business. However, the bottom line declined from the prior year, reflecting margin pressure from higher markdowns, tariff-related costs and elevated SG&A expenses.

lululemon’s fiscal first-quarter EPS of $1.69 declined 35% year over year but surpassed the Zacks Consensus Estimate of $1.67 by 1.2%.

The Vancouver, Canada-based company’s quarterly revenues increased 4% from the year-ago period to $2.47 billion and 2% on a constant-dollar basis. Revenues beat the Zacks Consensus Estimate of $2.43 billion by 1.6%. The quarter’s top-line growth was driven by strong international demand, even as comparable sales (comps) declined 2% on a constant-dollar basis and North America remained under pressure.

Total comps rose 1% year over year and declined 2% on a constant-dollar basis. Comps in the Americas dipped 5% on a reported basis and 6% on a constant-dollar basis. Internationally, comps increased 13% on a reported basis and 18% on a constant-dollar basis. Our model predicted comps growth of 0.3% for the fiscal first quarter.

Shares of the company declined 11.5% in the after-hours trading session on June 4, 2026, following the soft earnings performance in first-quarter fiscal 2026 and a bleak guidance. The Zacks Rank #3 (Hold) company has lost 26.6% in the past three months compared with the Textile - Apparel industry’s 9% decline.

Image Source: Zacks Investment Research

LULU’s Regional Mix Shifts Toward Overseas GrowthInternational markets did most of the heavy lifting, with revenues increasing 22% y/y (up 16% in constant dollars). China Mainland net revenues rose 30% year over year to $478.4 million (23% in constant dollars), while the Rest of World segment generated $372.0 million, up 13% (9% in constant dollars). Comps momentum also skewed overseas, with China Mainland up 20% (13% in constant dollars) and Rest of World up 5% (1% in constant dollars).

The Americas business remained the key drag. Net revenues in the region declined 3% year over year (down 4% in constant dollars). Within the Americas segment, revenues declined 3% year over year in Canada (down 6% in constant dollars) and 4% in the United States, on both reported and constant-dollar basis.

This underscores that the company’s growth engine is currently being powered more by market expansion outside North America than by broad-based demand improvement at home.

lululemon’s Channels & Categories Show Mixed DemandBy channel, store-led growth returned, supported by ongoing fleet expansion and optimizations. Store channel sales increased 3% year over year. Digital also contributed, with e-commerce revenues rising 4% and representing $1 billion, or 40% of quarterly sales.

Category trends were similarly mixed: men’s revenues increased 7% year over year and women’s rose 4%, while accessories and other revenues declined 1%. The split suggests demand remained healthiest in core apparel, particularly men’s, while discretionary add-on categories lagged.

LULU’s Tariffs & Markdowns Pressure Gross MarginProfitability weakened sharply as higher costs weighed on product economics. The gross margin declined 410 basis points (bps) year over year to 54.2%, driven by a 330-bps product margin pressure and 140 bps of fixed-cost deleverage. We expected the gross margin to contract 380 bps year over year to 54.5% for the fiscal first quarter.

Management attributed the product margin decline primarily to tariffs and markdowns. Tariffs reduced the gross margin by 280 bps in the quarter, partially offset by 100 bps of benefit tied to enterprise efficiency initiatives. Markdowns increased 40 bps, while higher occupancy and depreciation costs contributed to the fixed-cost deleverage. Favorable foreign exchange provided a 60-bps tailwind but was not enough to offset the broader cost headwinds.

lululemon’s Costs Rise on Activations & Proxy ContestOperating expenses also moved higher as the company leaned into brand activity and reintroduced costs that were reduced last year. Selling, general and administrative (SG&A) expenses rose 12.4% to $1.1 billion. SG&A expenses, as a percentage of net revenues, of 42.9%, reflected 310 bps of year-over-year deleverage. Drivers included higher employee costs, the timing of brand activations and expenses tied to the proxy contest.

Our model predicted SG&A expenses to rise 11.1% year over year for the fiscal first quarter, with a 330-bps increase in the SG&A expense rate to 43.1%.

The combination of gross margin compression and SG&A deleverage made operating income fall to $276.9 million, with the operating margin contracting 730 bps to 11.2% from 18.5% in the year-ago quarter.

Our model predicted a 37% year-over-year decline in adjusted operating income to $276.5 million. We estimated the operating margin to decline 710 bps to 11.4%.

Snapshot of LULU’s Store PlansIn first-quarter fiscal 2025, lululemon opened 5 net new stores, including 11 store openings and six closures. The company also completed six optimizations. As of May 3, 2026, it operated 816 stores.

In the second quarter of fiscal 2026, the company expects to open 13 net new company-operated stores and complete 13 store optimizations. For fiscal 2026, lululemon expects to be closer to the low-end of the 40-45 net new company-operated stores target and complete 35 optimizations. Store openings in fiscal 2026 are expected to include 10-15 in North America, including about eight locations in Mexico.

Additionally, the company expects 25-30 store openings in the international markets in fiscal 2026, with the majority planned for China. LULU expects overall square footage growth in the low-double digits for fiscal 2026.

lululemon’s Other Financial DetailsLULU ended first-quarter fiscal 2026 with $1.5 billion in cash and cash equivalents. Inventory was $1.7 billion, up 2% on a dollar basis, while unit inventory decreased about 4%, reflecting the impacts of higher tariff rates and foreign exchange. The company also repurchased 2.2 million shares for $358.3 million in the fiscal first quarter.

For fiscal 2026, the company expects dollar inventory to increase in the low to mid-single digits and inventory per unit to be down slightly. For fiscal 2026, lululemon expects capital expenditure of $700-$720 million.

As of May 3, 2026, the company had $1 billion remaining under its share repurchase program. LULU expects the repurchase levels in fiscal 2026 to be broadly in line with fiscal 2025.

LULU’s Outlook Reflects Softer Trends in Q2In the earnings call, management cited a recent moderation in sales trends tied to spikes of negative brand commentary and product launches that have not met expectations, and noted it is moving with urgency to adjust product and increase marketing and community activations.

Management’s near-term outlook points to a tougher demand and margin setup in the fiscal second quarter. LULU expects net revenues of $2.45-$2.475 billion, implying a 2-3% decline from the prior-year period. The company guides earnings to decline to $1.76-$1.81 per share from the $3.10 reported in the year-ago quarter.

By region, management expects North America revenues to decline in the low double digits in the fiscal second quarter, with the United States also down in the low double digits. China Mainland revenues are expected to increase in the mid to high-teens, while Rest of World revenues are projected to rise in the high single to low double digits.

LULU projected the gross margin to contract 410 bps year over year, led by higher tariff costs, and ongoing investments in store openings, optimizations and distribution network. Tariffs expected to be a 150-bps headwind, with offsets of 100 bps. Meanwhile, markdowns are likely to rise 50 bps due to additional seasonal clearance. The company also anticipates SG&A deleverage of 500 bps in the fiscal second quarter, reflecting lower sales, proxy-related costs, increased marketing and higher store labor expenses.

LULU expects the second-quarter fiscal 2026 operating margin to contract 910 bps year over year to 11.6%. LULU estimates an effective tax rate of 30% for the fiscal second quarter.

lululemon’s Targets for FY26For fiscal 2026, LULU lowered its outlook and expects revenues of $11-$11.15 billion, suggesting flat to a 1% year-over-year fall. Earlier, the company expected net revenues of $11.35-$11.5 billion. lululemon projects earnings of $10.95-$11.15 per share, suggesting a dip from the $13.26 reported in fiscal 2025. Earlier, the company projected an EPS of $12.10-$12.30.

Regionally, management expects North America revenues to decline in the high single digits, with the United States slightly weaker and Canada relatively better. China Mainland revenues are projected to rise 20%, while Rest of World revenues are expected to increase in the mid-teens.

LULU forecasts the gross margin to decline 90 bps year over year, driven mainly by fixed-cost deleverage and ongoing investments in new store openings, optimizations and the distribution center network. Markdowns are expected to be flat to slightly improved for the year, while tariffs are expected to have a gross impact of 30 bps that the company expects to offset almost entirely.

The updated outlook assumes a 10% incremental tariff rate in the fiscal second quarter (down from a prior assumption of about 20%), while maintaining a 20% incremental tariff rate assumption for the back half of fiscal 2026. The guidance also assumes no recovery of tariffs paid under IEEPA.

For SG&A, management expects 290 bps of deleverage versus fiscal 2025, reflecting incentive compensation, store labor hours and continued investments to support growth, especially market expansion, improved omni capabilities and increased brand awareness. The outlook also incorporates costs layered back after reductions last year, one-time proxy contest expenses and higher marketing spending to rebuild brand momentum.

Overall, lululemon expects the fiscal 2026 operating margin to decline 380 bps from last year and projects an effective tax rate of 30% (versus registered 29.5% in fiscal 2025).

Solid Picks in LULU’s Broader IndustryWe have highlighted three better-ranked stocks from the same industry, namely Columbia Sportswear Company (COLM - Free Report) , Vince Holding Corp. (VNCE - Free Report) and Ralph Lauren Corporation (RL - Free Report) .

Columbia Sportswear engages in the sourcing, marketing and distribution of outdoor and active lifestyle apparel, footwear, accessories and equipment in the United States and internationally. COLM sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Columbia Sportswear’s 2026 sales and EPS indicates growth of 2.6% and 4.6%, respectively, from the year-ago period’s reported figures. Columbia Sportswear has a trailing four-quarter earnings surprise of 44.1%, on average.

Vince Holding operates as a retail company in the United States and internationally. VNCE has a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for VNCE’s fiscal 2026 sales and earnings indicates growth of 4.5% and 25%, respectively, from the year-ago period’s reported figures. VNCE has a trailing four-quarter earnings surprise of 647.2%, on average.

Ralph Lauren is a major designer, marketer and distributor of premium lifestyle products in North America, Europe, Asia and internationally. RL currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for Ralph Lauren’s fiscal 2027 sales and earnings indicates growth of 5.9% and 9.8%, respectively, from the year-ago period’s reported figures. RL has a trailing four-quarter earnings surprise of 9.1%, on average.

Key Takeaways Lululemon shares tumbled Friday after the athleisure apparel maker lowered its full-year outlook. The company saw sales weaken toward the end of the first quarter and into the current quarter amid worsening sentiment around its brand. Get personalized, AI-powered answers built on 27+ years of trusted expertise.

A weaker outlook has Lululemon’s stock plunging to its lowest level in years.

Shares of Lululemon Athletica (LULU) were down nearly 8% to $115 in recent trading, their lowest price since May of 2018, after the apparel maker lowered its full-year forecast. Lululemon said it now expects $11 billion to $11.15 billion in sales for the year, which would be flat to a 1% decline from last year, down from a previous forecast of $11.35 billion to $11.5 billion. Lululemon's second-quarter outlook of $2.45 billion to $2.48 billion in sales and earnings per share of $1.76 to $1.81 also came in well below what analysts were expecting, per Visible Alpha estimates.

Interim co-CEO Meghan Frank pointed to a drop in sales at the end of the first quarter and start of the second quarter amid "negative commentary in the media and on social channels," and said the company's recent product launches have had mixed performances, per an AlphaSense transcript.

Why This Matters to Investors Friday's stock slump and sliding sales could complicate Lululemon's turnaround effort in the months ahead of a new CEO taking over.

JPMorgan analysts cut their price target for Lululemon's stock to $149 from $173 following the report, citing the weaker outlook and comments about Lululemon's recent product launches. The company posted earnings per share of $1.69 on $2.5 billion in sales in for the first quarter, roughly in line with analysts' estimates.

Lululemon shares have been pressured for more than a year by sales struggles, a sudden CEO departure, and a proxy battle with founder Chip Wilson that was resolved last month. The athleisure company is looking to turn things around when its new CEO, former Nike (NKE) executive Heidi O’Neill, takes over the top job on Sept. 8.

With Friday's slump, Lululemon shares are down about 45% since the start of the year, and almost 60% in the last 12 months.

Lululemon Athletica shares fell more than 8% on Friday after the athleisure wear maker cut its annual profit forecast, fanning worries over the pace of its turnaround and shifting focus to the challenges awaiting the incoming CEO.

The selloff highlights growing investor unease over the once high-flying yoga wear brand, following a proxy battle with founder Chip Wilson and a series of product missteps that have dented its image, ahead of former Nike executive Heidi O’Neill taking over in September.

“Brand momentum is fading, share losses are building, and sales per foot are deteriorating …. The damage under the prior CEO is significant and long lasting,” Jefferies analysts said, adding that the company needs a full strategic reset under the new CEO.

The selloff highlights growing investor unease over the once high-flying yoga wear brand. REUTERS Brand pressure, lackluster innovation In the quarter, Lululemon attributed the sales weakness in part to a spike in “negative commentary” across media and social platforms, linked to a months-long proxy fight in which founder Wilson criticized the company’s leadership.

It also blamed product launches that failed to resonate with its core affluent female shopper.

Wilson, who is one of the company’s biggest independent shareholders, had accused the brand of having lost its “cool” factor, with leaders keen to “replicate mass-market, lower quality athletic retailers.”

The negative sentiment has been compounded by stumbles in product innovation, including complaints that its $108 “Get Low” leggings were see-through, alongside earlier issues with fit and design in recent launches.

The Vancouver-based company, whose leggings cost up to $178, is in the early stages of a turnaround, ramping up discounting on older inventory and revamping marketing as tariffs squeeze margins.

Valuation slides Its shares fell to an over seven-year low of $109.36 before closing at $114.23, adding to a bruising 12-month stretch in which the stock has lost nearly two-thirds of their worth.

Former Nike executive Heidi O’Neill taking over in September after a series of missteps. Hardy Wilson for Lululemon The company forecast a drop in second-quarter sales for the first time since the pandemic, prompting at least nine brokerages to cut their price target on the stock.

The median PT has fallen to $149 from $205 three months ago.

Growth has also been stifled by newer, fast-growing players in the space such as Alo, Vuori and Skims in the US, even as China remains a bright spot for Lululemon.

For the full year, profit is now expected to slide up to 17% following a 9% drop in 2025 and operating margin is seen contracting 380 basis points to 16.1%, the lowest since 2006, according to brokerage William Blair.

Founder Chip Wilson had criticized the company’s direction but recently ended his proxy fight. REUTERS Against this backdrop, attention is turning to incoming CEO O’Neill, with investors closely watching whether she can revive product innovation and restore momentum in the US.

The company’s valuation multiple has compressed to around 10 times forward earnings, well below 22.85 for Nike and 15.10 for Adidas, according to LSEG data.

“Now that the CEO transition path is set, fundamentals come back into view and they are not good,” said BNP Paribas analyst Laurent Vasilescu.

Did lululemon athletica inc. Insiders Breach their Fiduciary Duties to Shareholders? PR Newswire NEW YORK, June

Lululemon (LULU 2.06%) reported quarterly financial results that disappointed the stock market and investors.

*Stock prices used were the afternoon prices of June 3, 2026. The video was published on June 5, 2026.

Parkev Tatevosian, CFA has positions in Lululemon Athletica Inc. The Motley Fool has positions in and recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

A week ago, I predicted that Lululemon Athletica (LULU 2.06%) stock would take a beating if the company reported weak earnings or lowered its 2026 guidance. And unfortunately, both of those things happened when the company posted its fiscal 2026 first-quarter report on June 4.

Now the company is trading at an eight-year low, having fallen more than 12% post-earnings. Where does the athleisure company go from here?

Lululemon’s earnings by the numbersFirst, let’s see what happened. For the quarter ending May 3, Lululemon posted revenue of $2.47 billion, up from $2.37 billion a year ago. However, the cost of goods sold jumped 14% year over year, pushing the company’s gross profit down by more than 4%. On top of that, Lululemon’s selling and general expenses rose 12.4%, to $1.05 billion. All that led to the company’s net income falling 38% to $195 million for the quarter. Earnings per share were $1.69, versus $2.60 in the same period a year ago.

While Lululemon is growing in popularity in China, its biggest problem lies in domestic sales, as revenue and comparable sales in the U.S. were down significantly from last year.

Net RevenueChangeForeign ExchangeChange in Constant DollarsUnited States(4%)-%(4%)Canada(3%)(3%)(6%)Americas(3%)(1%)(4%)China Mainland30%(7%)23%Rest of World13%(4%)16%Total International22%(6%)16%Total4%(2%)2%Source: Lululemon

Comparable SalesChangeForeign ExchangeChange in Constant DollarsAmericas(5%)(1%)(6%)China Mainland20%(7%)13%Rest of World13%(5%)1%Total1%(3%)(2%)Source: Lululemon

Management also cut full-year guidance, now projecting revenue of $11 billion to $11.15 billion, a decline of up to 1% from a year ago. Earnings per share are expected to be in the range of $10.95 to $11.15.

Interim co-CEO Meghan Frank acknowledged “a few headwinds and a moderating sales trend” and placed the blame on poor product launches and “spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance.”

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A proxy fight takes a toll on earningsFrank didn’t mention him by name, but at least part of that negative commentary stemmed from a very public proxy fight with founder Chip Wilson, which was settled just days before the earnings report. Wilson, who left the company in 2013 and continues to hold nearly 9% of the company’s stock, has been an outspoken critic, accusing the company of squandering "billions of dollars in brand power."

Wilson had also criticized Lululemon’s newly hired CEO, former Nike executive Heidi O’Neill. O’Neill won’t start work at Lululemon until Sept. 8, so the company still has several months of interim leadership before O’Neill takes over.

Image source: The Motley Fool.

However, Lululemon won’t have to worry about Wilson being a public distraction. The founder agreed to an 18-month non-disparagement clause as part of its settlement, which also saw Lululemon agree to add two of Wilson’s candidates to the board of directors.

Where does Lululemon go from here?The company faces significant challenges, as tariffs and higher fuel and other expenses pressure margins. Lululemon has applied for a refund of the tariffs following the Supreme Court’s ruling that they were illegal. But it’s unclear when those refunds will be processed.

Lululemon’s premium line of yoga and training pants, shorts, and tops also leaves little room for the company to reduce prices to boost sales. The company plans to reduce in-store offerings by 15% to better highlight newer products and improve its marketing and community engagement.

However, some analysts are skeptical that it will pay off in the short term. “We do not believe the root of the challenges has been fully diagnosed and see the company as being in a holding pattern as we await the arrival of incoming CEO Heidi O’Neill in September,” BTIG analyst Janine Stichter wrote in a note to clients. Another analyst, BNP Paribas Securities, downgraded the stock to “Underperform” and cut its price target from $179 to $88. Stifel analyst Peter McGoldrick cut his price target from $176 to $134, although he maintained his “Hold” rating.

Now down 43% this year and trading at its lowest level since 2018, Lululemon faces a long road back and has substantial hurdles to clear. This is a stock to avoid for now.

Lululemon (LULU - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this athletic apparel maker have returned -3%, compared to the Zacks S&P 500 composite's no change. During this period, the Zacks Textile - Apparel industry, which Lululemon falls in, has gained 3.9%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

Lululemon is expected to post earnings of $2.14 per share for the current quarter, representing a year-over-year change of -31%. Over the last 30 days, the Zacks Consensus Estimate has changed -34.8%.

The consensus earnings estimate of $11.57 for the current fiscal year indicates a year-over-year change of -12.8%. This estimate has changed -7.1% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $12.43 indicates a change of +7.4% from what Lululemon is expected to report a year ago. Over the past month, the estimate has changed -7.3%.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Lululemon.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Lululemon, the consensus sales estimate of $2.47 billion for the current quarter points to a year-over-year change of -2.4%. The $11.15 billion and $11.68 billion estimates for the current and next fiscal years indicate changes of +0.4% and +4.7%, respectively.

Last Reported Results and Surprise HistoryLululemon reported revenues of $2.47 billion in the last reported quarter, representing a year-over-year change of +4.3%. EPS of $1.69 for the same period compares with $2.6 a year ago.

Compared to the Zacks Consensus Estimate of $2.43 billion, the reported revenues represent a surprise of +1.59%. The EPS surprise was +1.2%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Lululemon is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Lululemon. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.