Lululemon (LULU - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this athletic apparel maker have returned -17.9% over the past month versus the Zacks S&P 500 composite's -0.4% change. The Zacks Textile - Apparel industry, to which Lululemon belongs, has lost 7.1% over this period. Now the key question is: Where could the stock be headed in the near term?
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.
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 $1.36 per share for the current quarter, representing a year-over-year change of -47.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -61.5%.
The consensus earnings estimate of $9.49 for the current fiscal year indicates a year-over-year change of -28.4%. This estimate has changed -20.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $9.55 indicates a change of +0.7% from what Lululemon is expected to report a year ago. Over the past month, the estimate has changed -17%.
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 GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Lululemon, the consensus sales estimate for the current quarter of $2.31 billion indicates a year-over-year change of -9.9%. For the current and next fiscal years, $10.62 billion and $10.73 billion estimates indicate -4.3% and +1.1% changes, respectively.
Last Reported Results and Surprise HistoryLululemon reported revenues of $2.42 billion in the last reported quarter, representing a year-over-year change of -4.3%. EPS of $2.06 for the same period compares with $3.1 a year ago.
Compared to the Zacks Consensus Estimate of $2.47 billion, the reported revenues represent a surprise of -2.07%. The EPS surprise was +15.08%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
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.
Have you assessed how the international operations of Lululemon (LULU - Free Report) performed in the quarter ended July 2026? For this athletic apparel maker, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.
The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.
International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.
In our recent assessment of LULU's quarterly performance, we discovered notable trends in its overseas revenue sections, which are typically modeled and scrutinized by Wall Street analysts.
The recent quarter saw the company's total revenue reaching $2.42 billion, marking a decline of 4.3% from the prior-year quarter. Next, we'll examine the breakdown of LULU's revenue from abroad to comprehend the significance of its international presence.
A Look into LULU's International Revenue StreamsDuring the quarter, Canada contributed $285.82 million in revenue, making up 11.8% of the total revenue. When compared to the consensus estimate of $298.6 million, this meant a surprise of -4.28%. Looking back, Canada contributed $283.34 million, or 11.5%, in the previous quarter, and $321.29 million, or 12.7%, in the same quarter of the previous year.
China Mainland generated $407.1 million in revenues for the company in the last quarter, constituting 16.9% of the total. This represented a surprise of -12.62% compared to the $465.91 million projected by Wall Street analysts. Comparatively, in the previous quarter, China Mainland accounted for $478.4 million (19.4%), and in the year-ago quarter, it contributed $392.9 million (15.6%) to the total revenue.
Of the total revenue, $51.42 million came from Hong Kong SAR, Taiwan, and Macau SAR during the last fiscal quarter, accounting for 2.1%. This represented a surprise of -4.71% as analysts had expected the region to contribute $53.96 million to the total revenue. In comparison, the region contributed $51.41 million, or 2.1%, and $47.63 million, or 1.9%, to total revenue in the previous and year-ago quarters, respectively.
Other geographic areas accounted for 14.1% of the company's total revenue during the quarter, translating to $340.35 million. Revenues from this region represented a surprise of -5.65%, with Wall Street analysts collectively expecting $360.74 million. When compared to the preceding quarter and the same quarter in the previous year, Other geographic areas contributed $320.59 million (13%) and $326.47 million (12.9%) to the total revenue, respectively.
During the quarter, Mexico contributed $28.89 million in revenue, making up 1.2% of the total revenue. When compared to the consensus estimate of $25.55 million, this meant a surprise of +13.09%. Looking back, Mexico contributed $24.66 million, or 1%, in the previous quarter, and $21.92 million, or 0.9%, in the same quarter of the previous year.
Projected Revenues in Foreign MarketsWall Street analysts expect Lululemon to report a total revenue of $2.31 billion in the current fiscal quarter, which suggests a decline of 9.9% from the prior-year quarter. Revenue shares from Canada, China Mainland, Hong Kong SAR, Taiwan, and Macau SAR, Other geographic areas and Mexico are predicted to be 12.5%, 21.5%, 2.2%, 15.7%, and 1%, corresponding to amounts of $289.31 million, $497.67 million, $49.85 million, $362.59 million, and $22.08 million, respectively.
For the full year, a total revenue of $10.62 billion is expected for the company, reflecting a decline of 4.4% from the year before. The revenues from Canada, China Mainland, Hong Kong SAR, Taiwan, and Macau SAR, Other geographic areas and Mexico are expected to make up 12%, 18.5%, 2.1%, 14.1%, and 1% of this total, corresponding to $1.27 billion, $1.96 billion, $220.11 million, $1.5 billion, and $108.68 million, respectively.
In ConclusionLululemon's leaning on foreign markets for its revenue stream presents a mix of chances and challenges. Therefore, a vigilant watch on its international revenue movements can greatly aid in projecting the company's future direction.
In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.
Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.
The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.
At present, Lululemon holds a Zacks Rank #5 (Strong Sell). This ranking implies that its near-term performance might underperform the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Examining the Latest Trends in Lululemon's Stock ValueOver the past month, the stock has lost 17.9% versus the Zacks S&P 500 composite's 0.4% decrease. The Zacks Consumer Discretionary sector, of which Lululemon is a part, has declined 2.3% over the same period. The company's shares have declined 10.7% over the past three months compared to the S&P 500's 4.7% increase. Over the same period, the sector has declined 0.3%
Index Dow Jones -0,75 % na 52387,9 b. S&P 500 -0,35 % na 7646,52 b. Nasdaq Composite -0,43 % na 26308,67 b.
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Z indexu S&P 500 zaznamenávají největší pokles akcie amerického řetězce obchodů se smíšeným zbožím Casey's General Stores (-17 %), který zveřejnil výsledky hospodaření za první kvartál fiskálního roku 2027, jeho porovnatelné tržby zaostaly za očekáváním.
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BMO Capital Markets zahájila pokrývání společnosti Lululemon Athletica (-4,2 %) s doporučením „Underperform" a cílovou cenou 70 USD. Analytici z Citi přistoupili ke snížení cílové ceny u této společnosti ze 130 USD na 117 USD a ponechali doporučení „Neutral“.
Index S&P 500 -0,35 % na 7646,52 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Energie +0,9 % Zbytná spotřeba -1,1 % Informační technologie -0,1 % Průmysl -0,9 % Zdravotní péče -0,2 % Nezbytná spotřeba -0,8 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Marvell Technology (MRVL) +5,4 % Casey's General Stores (CASY) -17 % Meta Platforms (META) +5,3 % Tractor Supply (TSCO) -5,5 % Datadog (DDOG) +4,6 % Booking Holdings (BKNG) -4,3 % Dell Technologies (DELL) +4,4 % Vertiv Holdings (VRT) -4,3 % Akamai Technologies (AKAM) +4,3 % Lululemon Athletica (LULU) -4,2 % Zdroj: Bloomberg
NEW YORK, Sept. 08, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of lululemon athletica inc. (“lululemon” or the “Company”) (NASDAQ: LULU). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.
The investigation concerns whether lululemon and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
[Click here for information about joining the class action]
On September 3, 2026, lululemon reported its financial results for the second quarter of fiscal year 2026. Among other items, lululemon reported lower-than-expected revenue and sharply lowered its full-year revenue and earnings guidance. The Company’s management attributed its disappointing quarterly results to negative media and social-media commentary, softer-than-planned new-product launches, and weaker store traffic.
On this news, lululemon’s stock price fell $21.16 per share, or 17.38%, to close at $100.61 per share on September 4, 2026.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
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Michael Burry, a hedge fund manager and investor known for predicting the 2008 financial crash, has just updated his portfolio, with some notable new positions catching the market's attention.
lululemon faces worsening fundamentals with Q2 sales down 4% YoY and a 9% drop in comparable sales. Americas led the declines. Margins contracted sharply, with core gross margin down 360 bps and operating leverage deteriorating due to higher SG&A amid falling revenues. Q3 and full-year guidance signal worsening prospects: Q3 revenue is expected to drop 10–11% YoY, and full-year EPS is down 34% at midpoint, excluding tariff refund benefits.
While Wall Street piles into AI darlings, Michael Burry is quietly loading up on call options in three stocks the market left for dead, and his biggest bets carry a very specific thesis about where the crowd got it wrong.
Michael Burry, the Scion Asset Management founder made famous by The Big Short, has rotated hard into three names Wall Street left for dead. According to a portfolio breakdown circulating this week, his largest position is UNH calls at 18.88%, followed by REGN calls at 18.16% and LULU calls at 16.43%. Nine of ten disclosed positions are call options, giving him leveraged upside on the dip with defined downside. Notably absent: the mega-cap AI trade.
Burry’s pitch, as summarized in the disclosure, is that UnitedHealth, Lululemon, Estee Lauder, and JD.com are all names that got destroyed, and he is betting they snap back hard. Here is what the fundamentals say about the three healthcare and consumer bets he sized largest.
UnitedHealth: Margin Recovery Already Underway UnitedHealth Group (NYSE:UNH | UNH Price Prediction) trades at $394.34, up 21.06% year to date but still languishing after a brutal 2025. The Q2 2026 report gave Burry’s thesis teeth. Adjusted EPS came in at $6.38 on revenue of $112.03B, and consolidated operating earnings jumped to $7.99B from $5.15B a year earlier, a 55% increase. The medical care ratio improved to 86.7% from 89.4%, aided by $860M in favorable prior-period reserve development.
Management raised full-year adjusted EPS guidance to $19.50 to $20.00 and doubled the 2026 buyback commitment to at least $5B. CFO Dan Keeter framed the setup on the call: “I see 26 as a delay to that margin recovery trajectory not a setback.” Consensus for fiscal 2027 EPS has climbed to $22.44, putting the stock at roughly 18 times forward earnings. See the Q2 8-K for the raw release.
Regeneron: Dupixent Offsets EYLEA Erosion Regeneron Pharmaceuticals (NASDAQ:REGN) has been the quiet winner of the three, up 47.74% over the past year to $833.83. Q2 was a blowout: non-GAAP EPS of $14.29 versus the $8.00 consensus, a 78.62% surprise, and revenue up 16.7% to $4.29B. Dupixent, partnered with Sanofi, hit $6 billion in global net sales, up 38% year over year, with more than 1.5 million patients actively treated worldwide.
EYLEA HD U.S. sales grew 52% to $962.6M, cushioning the biosimilar-driven 45% decline in legacy EYLEA. Crucially, Regeneron fully repaid the Sanofi development balance at the end of Q2, which management said will produce a meaningful step-up in collaboration profits from Q3 onward. That is the fundamental catalyst behind Burry’s call bet.
Lululemon: Deep-Value Bet on a Broken Brand Lululemon Athletica (NASDAQ:LULU) is the most controversial position, down 52.07% year to date to $99.60. Q2 fiscal 2027, reported September 3, showed why. Revenue fell to $2.42B, down 4.3% YoY, with comparable sales down 9% globally and Americas comps down 12%. Women’s leggings sales declined approximately 20% in Q2. Management cut full-year 2026 revenue guidance to $10.35B to $10.50B and EPS to $9.48 to $9.73.
Burry’s contrarian read, per the summary: Lululemon has substantial cash and almost no debt, historically high returns on capital, and tangible value that has grown even as the stock collapsed. He has reportedly called LULU “screaming cheap” and kept adding despite the pain. Incoming CEO Heidi O’Neill joined the week after the Q2 report, and the company repurchased 2.7 million shares for $330M in Q2. Our earlier take on the setup is here.
What to Watch Next Burry’s structure matters as much as his picks. Calls decay, so timing is everything. UnitedHealth’s Q3 earnings report on Medicare cost trends, Regeneron’s November 2026 FDA decision on simdesiran, and Lululemon’s holiday comps under new leadership are the three catalysts that will decide whether Burry’s short-dated bets pay or expire worthless. For investors, the value is in noting where a well-known contrarian sees mispriced risk while the crowd chases GPUs (we studied a batch of recent runners most investors ignored and turned the pattern into a free report on the winners you already missed).
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Buy LULU below $100. The stock is pricing a permanent loss of earnings power, but the business still has a premium brand and the CEO transition is the catalyst to stabilize sales and product relevance. The setup is valuation dislocation after a guidance cut and comp declines, with the market focused on “brand problem” narratives that may be overstated versus a temporary execution miss.
Key Risk: The new CEO fails to stop share loss and product relevance keeps deteriorating, turning the earnings drop into a structural brand decline.
Lululemon vs peers (LULU long / competitor short)
Go long LULU and short a direct competitor like Vuori (private) is hard to short, so use a listed proxy: short Alo Yoga is not public; instead short Nike (NKE) as a proxy for “premium athleisure demand” while going long LULU. If LULU’s brand asset is real, it should outperform broad discretionary weakness and regain traffic faster than the market expects, while NKE’s broader apparel exposure won’t get the same upside from LULU-specific turnaround.
Key Risk: Athleisure demand weakens broadly and LULU keeps underperforming because the issue is category-level, not company execution.
Michael Burry is buying exactly what Wall Street wants nothing to do with.
Lululemon stock NASDAQ:LULU has lost more than half its value this year after weak product launches, falling Americas sales and another guidance cut pushed the stock below $100 for the first time since 2018.
Yet Burry has called Lululemon the “trickster” in his portfolio and said he would buy more below $100.
His wager is not that the turnaround is working, but that the market may be pricing today’s problems as permanent.
Lululemon once traded as a premium growth stock. After Friday’s 17.4% slump to $99.10, the shares are down almost 80% from their all-time high.
In a Substack post, Burry called Lululemon his portfolio’s “trickster” and said it was his largest position.
He acknowledged the latest quarter had worsened assumptions for US and China growth but did not abandon the thesis.
Yahoo Finance reported that Burry intended to add below $100. He has argued that bad management can create value opportunities when a durable business survives operational mistakes.
Wall Street is less forgiving. JPMorgan analyst Matthew Boss cut his target by 38% to $95 from $154 while keeping a Neutral rating.
The disagreement is stark, as Burry sees sub-$100 as an opportunity, while JPMorgan’s target suggests the price may simply reflect weaker earnings power.
Lululemon’s latest numbers make the bearish case difficult to dismiss.
Fiscal second-quarter revenue fell 4% to $2.42 billion, while comparable sales declined 9%. Americas revenue dropped 8%, and comparable sales there fell 12%.
Management cut full-year revenue guidance to $10.35 billion-$10.5 billion from $11 billion-$11.15 billion and reduced its earnings outlook to $9.48-$9.73 a share.
Reported quarterly EPS of $2.92 also included an $0.86 benefit from tariff refunds.
The concern is increasingly about product relevance rather than one weak quarter. Competition from Alo Yoga and Vuori has intensified, while Lululemon has acknowledged inconsistent responses to recent launches.
Barron’s reported that Jefferies analyst Randal Konik said incoming CEO Heidi O’Neill has “a mountain to climb,” arguing that brand momentum is fading and market-share losses are mounting.
UBS cut its target to $106 from $120, citing weak traffic, an assortment that is not resonating and the risk of further earnings pressure.
O’Neill is due to take over as chief executive on Tuesday after months of leadership uncertainty.
The former Nike executive brings experience across product, merchandising and brand strategy. But she inherits shrinking Americas sales, weaker margins, tougher competition and lower investor confidence.
Morningstar analyst David Swartz still sees value. After the latest results, he said Lululemon shares remained attractive despite the guidance cut and maintained that the company has a meaningful brand asset that can support premium pricing.
That view is much closer to Burry’s thesis.
Lululemon does not need to return immediately to its old hypergrowth days for the stock to work. It needs O’Neill to stabilise sales, restore product relevance and show that today’s earnings decline is temporary rather than structural.
Lululemon Athletica Inc. founder Chip Wilson and his wife and longtime business partner, Shannon "Summer" Wilson, are reportedly divorcing after more than two decades of marriage.
A family legal proceeding between the couple was filed in the Supreme Court of British Columbia in April, though the contents of the case are not publicly accessible, Bloomberg reported.
Bloomberg, citing a person familiar with the matter, also reported that there is no prenuptial agreement between the couple, though it remains unclear how the divorce could affect the division of their assets.
LAUREN SÁNCHEZ PLAYS MAJOR ROLE IN DEPLOYING BEZOS' FULL $10 BILLION CLIMATE FUND BY END OF DECADE: REPORT
Chip Wilson, founder of Lululemon Athletica, and his wife, Shannon "Summer" Wilson, attend a news conference in Vancouver, British Columbia, on Sept. 15, 2022. (Taehoon Kim/Bloomberg via Getty Images)
Lululemon and Chip Wilson could not immediately be reached by FOX Business for comment.
Chip Wilson, 71, founded Vancouver-based Lululemon in 1998, according to Bloomberg.
He is widely credited with helping pioneer the athleisure apparel market.
According to the Bloomberg Billionaires Index, Chip Wilson has an estimated net worth of roughly $6.1 billion.
Summer Wilson, 52, served as the company's founding lead designer, according to her website. Chip Wilson has previously credited her with playing a key role in building the brand during its early years, Bloomberg reported.
LULULEMON HALTS ONLINE SALES OF NEW LEGGINGS AFTER 'SEE-THROUGH' CLAIMS
Chip Wilson is widely credited with helping pioneer the athleisure apparel market. (Taehoon Kim/Bloomberg via Getty Images)
The couple married in 2002.
Though both left the company more than a decade ago, Chip Wilson remains one of Lululemon's largest shareholders and has continued to publicly weigh in on the retailer's direction, Bloomberg reported.
He owns roughly 8.6% of the company, a stake worth just under $1 billion, while Summer Wilson owns nearly 1%, valued at about $100 million, according to Bloomberg.
Under British Columbia law, assets owned before a marriage generally remain excluded from division, while any increase in their value during the marriage is generally considered family property and is typically divided equally.
"In British Columbia, the value of assets brought into the marriage is not shareable, but the gain is called family property and presumptively divided 50-50," Lorne MacLean KC, founder of Vancouver-based MacLean Law, told The New York Post.
BILLIONAIRES AND BUSINESSES FUEL GROWING EXODUS FROM BLUE STATES
Chip Wilson remains one of Lululemon's largest shareholders and has continued to publicly weigh in on the retailer's direction. (Isabella Falsetti/Bloomberg via Getty Images)
The Wilsons' reported split joins a number of high-profile billionaire divorces in recent years.
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Amazon founder Jeff Bezos and MacKenzie Scott finalized their divorce in 2019. Scott received a roughly 4% stake in Amazon, then valued at about $36 billion, BBC News reported at the time.
In 2021, Microsoft co-founder Bill Gates and Melinda French Gates divorced after 27 years. Following the announcement, Bill Gates transferred billions of dollars in stock to Melinda French Gates, according to Vanity Fair.
Shareholders are urged to contact the firm immediately at no cost or obligation, as there may be limited time to enforce your rights.
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, /PRNewswire/ -- Halper Sadeh LLC, an investor rights law firm, is investigating whether certain officers and directors of lululemon athletica inc. (NASDAQ: LULU) breached their fiduciary duties to shareholders.
If you currently own lululemon stock and are a long-term shareholder, you may be able to seek corporate governance reforms, the return of funds back to the company, a court-approved financial incentive award, or other relief and benefits. Please click here to learn more about your legal rights and options or contact Daniel Sadeh or Zachary Halper at (212) 763-0060 or [email protected] or [email protected].
Why Your Participation Matters:
Shareholder involvement can help improve a company's policies, practices, and oversight mechanisms to create a more transparent, accountable, and effectively managed organization, which can enhance shareholder value.
Halper Sadeh LLC represents investors all over the world who have fallen victim to securities fraud and corporate misconduct. Our attorneys have been instrumental in implementing corporate reforms and recovering millions of dollars on behalf of defrauded investors.
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Nike, Dick's Sporting Goods, and Lululemon are all deep in the red while the broader retail sector climbs, and the divergence within athletic goods raises a harder question than which stock to buy next.
Lululemon Faces New Shock as Founder Chip Wilson's Divorce Raises Big Shareholder Questions Summary
Lululemon shares just suffered a brutal weekly selloff, and its founder’s reported divorce could create another layer of uncertainty around a nearly $1 billion stake
Lululemon (LULU) stock is facing another source of uncertainty after reports that founder Chip Wilson and his wife, Shannon Wilson, are divorcing, adding a new development as the apparel company's shares reel from a sharp weekly decline.
Lululemon fell nearly 17% this week after the company reduced its full-year outlook alongside its second-quarter 2026 results.
The latest report involving its founder could draw further attention because the couple continues to own a sizable position in the retailer.
Bloomberg News reported Saturday that the couple has discussed separation plans with friends. A family legal proceeding was filed in the Supreme Court of British Columbia in April, although details were not publicly available.
Wilson founded Lululemon in 1998 and stepped down from its board in 2015. He currently owns about 9% of the company, with his stake valued at nearly $1 billion. About 1% of the shares are held by his wife, worth close to $100 million.
The division of their assets has not been finalized, according to people familiar with the matter. The couple also does not have a prenuptial agreement.
The divorce does not change the company's operations, but potential changes involving a large shareholder position could add another layer of uncertainty after the recent selloff.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Ahead of Lululemon's (LULU -17.38%) fiscal Q2 earnings report, I wrote an article published on Aug. 26 that said the stock looked like a value trap and that the warning from Dick's Sporting Goods would likely spill over and impact it as well. The stock subsequently plunged 17% on Sept. 4, in the session following its earnings report, as the athleisure company reported disappointing results and cut its full-year outlook. The stock has now lost more than half its value this year and nearly three-quarters of its value over the past five years.
Let's dive into the yoga brand's latest results and prospects to see what could come next for the once-high-flying apparel stock.
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Troubles continue Unfortunately for Lululemon, cutting guidance has become commonplace. For the fourth time since last June, it slashed its full-year outlook. It now expects revenue to decline by 7% to 5% to between $10.35 billion and $10.5 billion, down from prior expectations for sales in a range of $11 billion to $11.15 billion. Full-year adjusted EPS is projected to be between $9.48 and $9.73, but that includes a $0.86 tariff refund. Earlier, it guided to adjusted EPS of $10.95 to $11.15 without a tariff refund.
The company's Q2 results were pretty dreadful, and it looks like things are only worsening. Management noted everything from negative social media commentary to weak responses to new product launches to increased competition and brand deterioration.
Overall, the company's Q2 revenue fell 4% year over year to $2.42 billion, missing the $2.46 billion consensus estimate. Adjusted earnings per share (EPS) plunged 34% to $2.01, but were above the $1.79 consensus.
The underlying numbers were even worse. Americas revenue sank 8%, while same-store sales plunged 12%. International revenue rose 4%, but only 2% in constant currencies, while comparable sales in constant currencies slipped 6%.
China had long been a bright spot for Lululemon, but revenue fell 2% in constant currencies while same-store sales dropped 8% excluding foreign currency movements. The company said it was impacted by negative brand sentiment, which shouldn't be surprising given its big PR gaffe in China when, at an important yoga event held on the Great Wall, it inadvertently gave a Chinese actor a Japanese taiko drum to play instead of a Chinese dagu drum. Rest-of-world sales rose 6% in constant currencies, but comparable-store sales on the same basis dropped 6%.
Gross margin decreased by 200 basis points to 60.5%, but it would have been down 360 basis points when excluding the tariff refund.
Inventory was basically flat year over year, and it is doing a decent job of keeping this in check. This is an important metric to monitor for struggling brands, as big increases above sales growth can lead to more markdowns and sales.
Looking ahead, things will start getting worse for the company just as its new CEO takes over. While it is not uncommon to set a low bar when a new CEO or CFO comes on board, the company still projected a pretty meaningful sales decline. It expects Q3 revenue to decline by 10% to 11% to between $2.290 billion and $2.320 billion. Adjusted EPS is expected to fall to between $0.93 and $0.98 for the quarter, versus $2.59 a year ago.
Image source: The Motley Fool
Is the stock a buy on the dip? While Lululemon stock looks cheap, now trading at a forward price-to-earnings (P/E) ratio of around 9 times this year's and next year's analyst estimates, the stock looks like it is set to fall into the same trap as other once very popular athletic apparel brands like Nike and Under Armour. The brand has lost its luster and faces increased competition, and, quite frankly, from my viewpoint, the athleisure fashion trend is shifting. I was recently eating lunch at Panera, and nearly everyone was wearing jeans. That is not something you would have seen a few years ago.
As such, this is a stock I'd still stay far away from, and it will likely take at least several years for a potential turnaround.
lululemon athletica (NASDAQ:LULU) reported second-quarter revenue and earnings that fell below its expectations, citing weaker traffic, inconsistent product launches and pressure on brand sentiment in North America and China Mainland. The company lowered its full-year outlook and said it is increasing marketing investment while tightening expenses and inventory management.
Total second-quarter net revenue declined 4% year over year, or 5% on a constant-currency basis, to $2.4 billion. Comparable sales fell 10%. Net income was $329 million, or $2.92 per diluted share, compared with $3.10 per share in the prior-year quarter. Tariff refunds and associated interest added $0.86 per share to quarterly earnings, the company said.
Regional weakness drives revenue decline North America revenue declined 8% in the second quarter, with comparable sales down 12%. U.S. revenue fell 8%, while Canada revenue declined 11% on a reported basis, or 9% in constant currency. China Mainland revenue rose 4% on a reported basis but declined 2% in constant currency, while comparable sales fell 8%. Interim Co-CEO and CFO Meghan Frank said the company faced negative media and social-channel commentary beginning late in the first quarter and early in the second quarter. That was compounded by commentary following the company’s first-quarter call regarding an event held at the Great Wall of China.
Interim Co-CEO, President and Chief Commercial Officer André Maestrini said those factors hurt traffic in stores and digital channels. E-commerce was also affected by Tmall’s decision not to repeat its 618 Shopping Festival in the same manner as the prior year, as well as lululemon’s decision not to participate in promotions following the event.
Revenue in the company’s rest-of-world segment, consisting of EMEA and APAC, increased 5%, or 6% in constant currency, while comparable sales declined 3%. Maestrini said South Korea remained one of the company’s strongest markets, while Australia has become increasingly promotional. Lululemon has not joined those promotional events, which he said has slowed guest purchase behavior.
Product trends remain mixed Frank said women’s leggings sales declined approximately 20% during the quarter, a greater-than-expected slowdown in a core category. While the company remains committed to leggings and described itself as the category’s market leader, it is seeing consumer demand shift toward away-from-body silhouettes.
The company cited favorable performance from newer styles including Groove Wide-Leg, Align Foldover Jogger, Breezily and an updated Dance Studio Pant. Other products performing well included the Define franchise, Scuba and Steady State tops in the company’s SuperLoft fabric, men’s Metal Vent Tech tees and golf tops. The golf assortment also supported sales of ABC bottoms, management said.
Men’s revenue declined about 1% during the quarter, women’s revenue declined 4%, and accessories and other revenue fell 13%. While backpacks remained strong, the company reported softness in bags and said it is editing its accessories assortment to better align with its future brand vision.
Frank said lululemon is increasing its use of chase capabilities to replenish stronger-performing products, with approximately 20% more volume being chased this year than last year. The company is also working to reduce SKUs, manage future inventory flows and shorten product-development lead times.
Marketing and store actions target traffic and conversion Management identified traffic as the largest driver of pressure across North America and China, while noting that conversion was also negative year over year but had not worsened. The company plans increased marketing investment in the second half, particularly in mid-funnel creator and social content, community events and athlete-focused storytelling.
Lululemon pointed to engagement from its summer yoga series across 70 U.S. and Canadian cities and the return of its SeaWheeze Half Marathon and Festival in Vancouver. The SeaWheeze event drew nearly 10,000 runners from 24 countries, while a related virtual Strava challenge attracted more than 85,000 participants across 120 countries. The company said it will bring the event back next summer.
In stores, Maestrini said lululemon has reduced SKU density by 15% and is rolling those changes across the North American fleet. The company is also testing more curated assortments, new fixture packages, additional imagery and activity mannequins in a smaller group of locations. Digital efforts include redesigned home and category-detail pages, with a product-detail-page update planned in the coming weeks.
Margins and outlook revised lower Second-quarter gross margin expanded 200 basis points to 60.5%, helped by 560 basis points from IEEPA tariff refunds. Excluding the refund, product margin was affected by tariff costs and higher markdowns. Operating income totaled $454 million, or 18.8% of revenue, compared with 20.7% a year earlier.
SG&A expenses rose to 41.7% of revenue from 37.7%, reflecting fixed-cost deleverage, investments in guest experience and marketing, and proxy-contest fees. The company said it is taking a more aggressive approach to cost management, including supply-chain efficiencies, non-merchandise procurement, automation, travel, professional fees, store labor hours and moderation of headcount growth.
Lululemon ended the quarter with $1.4 billion in cash and cash equivalents. Inventory was $1.7 billion, down 1% in dollars and down approximately 7% in units. During the quarter, it repurchased about 2.7 million shares at an average price of $120.
Third-quarter revenue is expected to decline 10% to 11% to a range of $2.29 billion to $2.32 billion. Third-quarter diluted EPS is projected at $0.93 to $0.98, versus $2.59 a year earlier. Full-year 2026 revenue is now expected to be $10.35 billion to $10.5 billion, down 5% to 7% from 2025. Full-year diluted EPS is forecast at $9.48 to $9.73, compared with $13.26 in 2025. The company now expects to open approximately 35 net new company-operated stores this year, down from its previous target of about 40. It plans roughly 10 openings in North America, including seven in Mexico, and about 25 in international markets. Frank said incoming CEO Heidi O’Neill, who joins next week, will review the business, strategy and current action plan.
About lululemon athletica (NASDAQ:LULU) 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.
For the past two months, investors had begun to whisper that the worst might be over for Lululemon Athletica Inc. NASDAQ: LULU.
The athletic-wear darling had fallen a long way from its peak, but a tentative recovery in the shares was starting to raise hopes that its troubles were finally bottoming out. Unfortunately for the bulls, the release of its Q2 2026 earnings report shattered that illusion.
Shares plunged in Thursday’s after-hours session and were down 18% in Friday's pre-market trading.
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The stock was trading around $100 before the bell, briefly dipping below $100 for the first time since 2018 and leaving shares roughly 80% below their 2024 peak.
lululemon athletica inc. (LULU) Price Chart for Saturday, September, 5, 2026
For a company that was once a stock-market superstar, it marks a stunning fall from grace.
If the question going into the earnings report was whether the numbers would justify the recent optimism, then the market's verdict leaves little doubt. This was, by almost any measure, about as bad a report as Lululemon could have delivered, and it vindicated the skeptics who had warned the recovery was built on sand.
An Earnings Beat That Wasn't What It SeemedAt first glance, there was one clear bright spot: Lululemon's $2.92 earnings per share (EPS) comfortably beat analyst expectations of $1.79.
But that quickly proved to be false hope.
On closer inspection, 86 cents per share came from tariff refunds and associated interest. Excluding that benefit, EPS would have been about $2.06—still above consensus, but considerably less impressive.
It was a cosmetic gloss on a fundamentally weak quarter, and once that benefit was stripped away, the picture got bleak quite quickly.
Not only did revenue actually contract from a year earlier, but it also missed analyst expectations.
Far from painting a picture of a business starting to turn a corner, as the more optimistic bulls had hoped, this report painted one of a business still very much in decline.
Americas Weakness Deepens as China Growth Slowslululemon athletica Today
LULU
lululemon athletica
$100.61 -21.16 (-17.38%)
As of 09/4/2026 04:00 PM Eastern
$97.99▼
$225.988.24
$116.46
The heart of Lululemon's problem lies in its home market, where it’s getting worse, not better.
In the Americas, once the engine of its phenomenal growth, revenue dropped 8% and underlying sales collapsed by 12%.
Management identified several headwinds, including weaker foot traffic, negative chatter on social media, and stumbling product launches, not to mention a painful 20% drop in sales of its signature leggings.
That last detail cuts to the core of the worry. When a brand's flagship product falls so sharply out of favor, it hints at something deeper than a passing slump: shoppers have drifted away, and rivals are clearly stealing ground.
In the fiercely competitive athleisure market that has already seen the likes of Nike Inc NYSE: NKE have their share price decimated, the worry now is whether Lululemon has had its day.
For a long time, the bulls had a ready answer to the American malaise: China. International expansion, and the vast Chinese market in particular, was supposed to pick up the slack. Yet this quarter that cushion gave way too, with Chinese revenue growing a meager 4%—and actually declining 2% in constant currency—far too little to offset the weakness back home.
Guidance Cuts Push the Turnaround Further OutThe most damning part of the report was not the past quarter but the outlook, which laid bare just how long the road ahead may be.
Management sharply cut its full-year guidance for the second time this year, lowering its fiscal year (FY) 2026 revenue outlook to $10.35 billion-$10.50 billion and EPS guidance to $9.48-$9.73. It also expects Q3 revenue to decline 10%-11%.
The scale of the guidance cut suggests management expects the current pressures to persist longer than previously anticipated. The market, in taking the shares down so viciously, has obviously taken them at their word.
None of this means the situation is beyond redemption. Lululemon’s valuation has now fallen so far that the shares trade at their lowest price-to-earnings ratio on record, and new CEO Heidi O'Neill could breathe fresh life into the company.
On paper, at least, a battered brand with a super-recognizable name, a loyal following, and a rock-bottom price does make for an interesting contrarian opportunity.
Beware the Falling Knife: Lululemon Is Cheaper, But Risks Remainlululemon athletica Stock Forecast Today12-Month Stock Price Forecast:
$116.46
15.75% Upside
Reduce
Based on 28 Analyst Ratings
Current Price$100.61High Forecast$225.00Average Forecast$116.46Low Forecast$44.00lululemon athletica Stock Forecast Details
For now, though, the caution is more than justified.
The uncomfortable truth is that Lululemon's problems appear structural rather than temporary, with a weakening core market, a faltering international cushion, and no obvious near-term catalyst to turn things around.
The tumble below $100 is more than just a symbolic milestone. It reflects a market that has finally accepted that the recovery story from the past few months was premature, and that the hard work of fixing the business has barely begun.
There may well be a bargain in Lululemon one day, once a credible turnaround plan is actually in place and delivering. But this week’s report was a stark reminder that catching this falling knife is a dangerous game and will likely remain so for a while yet. The risk remains elevated, and investors still have little evidence that sales trends, product execution, or brand momentum have stabilized.
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Lululemon Athletica (LULU -17.38%), a premium yoga-inspired athletic apparel company, closed at $100.61, down 17.38%. Shares fell after the company cut its full-year revenue and earnings outlook again, and investors will be watching to see how effectively the new CEO can turn things around.
Trading volume reached 37.1 million shares, coming in about 1,000% above its three-month average of 3.37 million shares. Lululemon IPO'd in 2007 and has grown 704% since going public.
How the markets moved todayThe S&P 500 (^GSPC -0.38%) closed at 7,718, down 0.38%, while the Nasdaq Composite (^IXIC -0.29%) finished at 26,507, down 0.29%. In athletic apparel stocks, Nike (NKE -0.95%) closed at $38.40, down 0.95%, while Deckers Outdoor (DECK +1.55%) closed at $85.81, up 1.55%, offering a mixed read on premium brand demand.
What this means for investorsLululemon's woes went from bad to worse today as the already-struggling stock cratered. Q2 net revenue fell 4% to $2.4 billion year-on-year, and the firm expects its Q3 revenue to be between $2.29 billion and $2.320 billion -- down around 10% on the year before. Today's falling revenue and guidance cut follow several difficult years, and the stock has fallen over 51% year-to-date.
One significant issue for Lululemon is that it has had two interim Chief Executive Officers for over seven months. The incoming CEO, Heidi O'Neill, is due to take the helm this month, but such a long period of placeholder leadership is bound to have an impact, particularly at a time when the firm needed to make a decisive turnaround.
Analysts, including JPMorgan, lowered their price targets for the stock as concern grew that recovery would take time. Lululemon remains a recognizable brand, but it is losing market share, and O'Neill will have her work cut out to reinvigorate the sportswear maker's sales.
JPMorgan Chase is an advertising partner of Motley Fool Money. Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deckers Outdoor, JPMorgan Chase, and Nike. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.
Shares of Lululemon Athletica (LULU -17.38%) plummeted on Friday after the athletic clothing maker slashed its full-year profit forecast.
Image source: Getty Images.
Sales shortfall Lululemon's net revenue declined 4% year over year to $2.4 billion in its fiscal second quarter, which ended on Aug. 2.
The retailer opened 11 new company-operated stores and closed two during the quarter, bringing its total to 825 locations.
Yet its comparable sales, which measure revenue at stores and direct-to-consumer e-commerce sites open for at least a year, fell 9%.
Shifting trends To the heartbreak of many, Lululemon's famed leggings appear to be going out of style.
"We remain committed to the category, but there are shifts occurring with guests looking for away-from-body silhouettes," interim co-CEO Meghan Frank said during a conference call with analysts.
Worse still, Lululemon is losing market share to rivals like Alo Yoga, according to retail intelligence provider PassBy.
In all, Lululemon's leggings sales sank roughly 20% in the second quarter.
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Lululemon's operating income, in turn, dropped 13% to $453.7 million. The decline would have been even steeper if not for $134.5 million in tariff refunds.
All told, the beleaguered company's earnings per share, which were propped up by stock buybacks, decreased 6% to $2.92.
Turnaround efforts are likely to take time Management sees more declines ahead. Lululemon expects its third-quarter net revenue to shrink by more than 10% to $2.3 billion.
Investors were also disheartened to see Lululemon cut its full-year earnings per share guidance to $9.48 to $9.73, down from a prior forecast of $10.95 to $11.15.
Incoming CEO Heidi O'Neill, a former Nike executive, will be facing quite a challenge when she takes the helm of the struggling apparel designer on Sept. 8.
Joe Tenebruso 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.
Zámořské akciové trhy zakončily dnešní obchodování v záporném teritoriu. Index Dow Jones klesl o 0,51 % na 53 414,25 bodu, S&P 500 odepsal 0,38 % na 7 718,60 bodu a technologický Nasdaq Composite ztratil 0,29 % na 26 506,99 bodu. Hlavním impulsem k poklesu byla překvapivě silná data z amerického trhu práce, která zvýšila pravděpodobnost, že centrální banka v září zvýší úrokové sazby.
Mezi sektory indexu S&P 500 se nejvíce dařilo průmyslu se ziskem 0,4 %, informačním technologiím s růstem o 0,2 % a utilitám, které stagnovaly. Naopak nejvýraznější pokles zaznamenala zbytná spotřeba se ztrátou 1,3 %, následovaná zdravotní péčí a energiemi se shodným poklesem o 1 %. Z jednotlivých akcií výrazně posílily společnosti Sandisk Corp (SNDK) o 12 %, KLA Corp (KLAC) o 7,3 %, Marvell Technology (MRVL) o 7,1 %, Coherent Corp (COHR) o 6,6 % a NRG Energy (NRG) o 6,4 %. Na opačné straně trhu se ocitla společnost Lululemon Athletica (LULU), jež po zhoršení celoročního výhledu propadla o 17 %. Výrazně ztrácely také společnosti Fair Isaac Corp (FICO) o 17 %, Autodesk (ADSK) o 8,3 %, Adobe (ADBE) o 6,7 % a Equifax (EFX) o 6,4 %.
Očekávání přísnější měnové politiky poslalo nahoru výnosy amerických vládních dluhopisů. Výnos dvouletého dluhopisu vzrostl na 4,37 %, výnos desetiletého dluhopisu stoupl na 4,78 %. Euro vůči americkému dolaru mírně oslabilo o 0,1 % na 1,1614 USD a japonský jen klesl o 0,3 % na 156,27 JPY za dolar. Ropa WTI mírně posílila o 0,1 % na 91,41 USD za barel, zatímco spotové zlato odepsalo 0,9 % na 4 432,58 USD za trojskou unci.
Index Dow Jones -0,51 % na 53414,25 b.
S&P 500 -0,38 % na 7718,6 b.
Nasdaq Composite -0,29 % na 26506,99 b.
Index S&P 500 -0,38 % na 7718,6 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Průmysl +0,4 % Zbytná spotřeba -1,3 % Informační technologie +0,2 % Zdravotní péče -1 % Utility +0 % Energie -1 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Sandisk Corp (SNDK) +12 % Lululemon Athletica (LULU) -17 % KLA Corp (KLAC) +7,3 % Fair Isaac Corp (FICO) -17 % Marvell Technology (MRVL) +7,1 % Autodesk (ADSK) -8,3 % Coherent Corp (COHR) +6,6 % Adobe (ADBE) -6,7 % NRG Energy (NRG) +6,4 % Equifax (EFX) -6,4 %
Daniel Marván
Fio banka, a.s.
Prohlášení
Investing is hard, even for some of the best in the business.
Dr. Michael Burry made a name for himself successfully betting against the housing market before it collapsed during the Great Recession. This series of events was portrayed in the well-known movie, "The Big Short," in which actor Christian Bale portrayed Burry.
Since then, Burry has run his own hedge fund and now runs a very popular Substack publication, where he shares his thoughts on the market and how he is investing his personal wealth.
This year, Burry's largest position, Lululemon (LULU -17.68%), has been crushed, down over 52%. The company recently reported abysmal earnings, sending its stock down nearly 18%, as of 12:36 p.m. ET on Sept. 4.
Should investors sell the stock?
Image source: Getty Images.
A tough year continued by a tough quarterIn the first quarter of Lululemon's fiscal year 2026, the company lowered its full-year guidance due to weak sales in North America and negative sentiment stemming from poorly perceived promotional campaigns.
In the recently reported second quarter, the company posted adjusted earnings per share of $2.06, handily beating Wall Street's expectations. However, revenue of $2.42 billion slightly missed consensus estimates, with comparable sales falling 9% year over year.
But what is even more concerning is that the luxury apparel maker once again significantly slashed its full-year outlook. Full-year revenue was expected to be in the range of $11 billion to $11.15 billion.
Now, management is calling for net revenue inside a range of $10.35 billion to $10.5 billion, reflecting a 5% to 7% annual decline. The kicker: the new outlook includes tariff refunds.
"Today, lululemon (LULU) is the trickster in my portfolio," Burry wrote in a Substack note. "This time the trickster is my largest position, and it does seem determined to take me where mermaids fear to tread."
For the second quarter in a row, Lululemon attributed struggles to "negative commentary," according to interim CEO Meghan Frank, who also cited a larger-than-anticipated decline in sales of some of its most critical categories, such as leggings.
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Gross margins actually increased 2% year over year to 60.5%, although they would have been 54.9%, excluding the positive lift from tariff refunds.
Wall Street analysts are all over the map with Lululemon. Following the report, analysts at BNP Paribas slashed their price target by 50% to $44 per share and maintained an underperform rating on the stock.
The stock currently trades around $100 per share, which is essentially the average price target among analysts who have issued research reports on the company over the past three months, according to TipRanks.
While Burry noted that the company's performance has been frustrating, he also said he remains invested and would buy more if the stock slipped below $100.
Lululemon has struggled due to the issues mentioned above, as well as sluggish sales in the Americas and weaker-than-expected growth in China. There's also been significant competition and complaints that the clothing has become stale.
An issue that I'm struggling with is that consumer spending hasn't exactly slowed this year. Real private domestic final purchases increased 3% in the first half of the year, and unemployment remains at 4.1%.
While issues at Lululemon remain company-specific, I do worry what would happen to sales should the economy show greater weakness.
However, for bulls like Burry, Lululemon is still generating strong gross margins and has a new CEO about to take over, which could rejuvenate the company's strategic direction. The stock also now trades at just over 9 times forward earnings.
So a higher safety buffer may now be priced in. But it can be tough to catch a falling knife; the brand continues to suffer, and I would be worried about what might happen to sales should the economy weaken further.
At this point, I'm more prone to keep this on the watch list or take a smaller, more speculative position.
Lululemon’s turnaround is getting a lot more painful.
Shares of the pricey yoga pants-maker plunged nearly 18% on Friday to an eight-year low after weak Americas sales forced it to slash its full-year outlook.
The disappointing figures came as incoming CEO Heidi O’Neill was set to take the reins of the company next Tuesday.
The stock was trading around $100.50 on Friday afternoon after hitting a low of $97.99, wiping billions of dollars from the company’s market value.
Lululemon now expects fiscal 2026 revenue to fall 5% to 7%, a sharp reversal for a company that once targeted $12.5 billion in sales this year. Getty Images The selloff followed a dismal second quarter in which revenue fell 4% to $2.42 billion and comparable sales sank 9% worldwide.
The damage was worse in the Americas, where revenue dropped 8% and comparable sales tumbled 12% as the athletic-apparel giant struggles to win back shoppers after a string of product missteps.
Lululemon now expects fiscal 2026 revenue between $10.35 billion and $10.50 billion, down 5% to 7% from last year.
Just three months ago, the company forecast revenue of $11 billion to $11.15 billion.
The Vancouver-based biz also slashed its full-year earnings forecast to $9.48 to $9.73 a share from $10.95 to $11.15 previously.
Incoming CEO Heidi O’Neill is set to take the reins at Lululemon on Sept. 8 as the athletic-apparel giant grapples with falling sales and product missteps. LinkedIn/Heidi O'Neill And the pain isn’t expected to let up soon. Third-quarter guidance calls for revenue to plunge between 10% and 11%.
The ugly numbers mean O’Neill’s work is cut out for her as Lululemon grapples with product missteps, weaker store productivity and intensifying competition. The ex-Nike exec will replace Calvin McDonald, who exited the company under heavy pressure at the end of January.
Lululemon’s comparable sales in North America fell 3% in the second quarter of fiscal 2024, when Lululemon pulled its $98 Breezethrough leggings following complaints about their fit and design.
By the second quarter of fiscal 2025, Americas comps were down 4%. They have now deteriorated to a 12% decline.
Another product headache surfaced in January, when Lululemon paused online sales of its new line after customer complaints, including concerns that the fabric was too sheer.
The misses have been especially damaging because women’s apparel accounted for 63% of Lululemon’s fiscal 2025 revenue.
Leggings sales dropped roughly 20% in the latest quarter as shoppers gravitated toward looser-fitting styles.
Lululemon shares plunged nearly 18% Friday after the company reported falling sales and sharply cut its full-year outlook. Perplexity AI Rivals Alo Yoga and Vuori have been grabbing market share at Lululemon’s expense.
Lululemon’s share of the athleisure market fell 10 percentage points to 43.9% in August, while Alo gained 5.9 points and Vuori picked up 2.2 points, M Science data showed.
Lululemon also appears to have built its operation for growth that never arrived.
The company ended fiscal 2025 with 811 stores, up from 767 a year earlier, while square footage expanded 11%.
But revenue from company-operated stores increased just 1%, and sales per square foot sank 9.4% to $1,426 from $1,574.
Lululemon athletica (LULU) is experiencing significant pressure following its disappointing Q2 results, with shares dropping below $100 for the first time in se
Key Takeaways LULU cut fiscal 2026 revenue guidance to $10.35B-$10.50B and EPS guidance to $9.48-$9.73.North America revenues fell 8% in Q2 as traffic weakened, while leggings sales dropped about 20%.LULU is chasing 20% more volume, cutting store SKUs 15% in North America and tightening expenses. lululemon athletica inc. (LULU - Free Report) used its fiscal second-quarter 2026 earnings call to acknowledge traffic pressure, uneven product acceptance and weaker brand sentiment. Management responded by cutting its full-year outlook and tightening costs.
Results also diverged from expectations. Earnings of $2.06 per share beat the Zacks Consensus Estimate of $1.79 by 15.1%, while revenues of $2.41 billion missed the consensus mark of $2.46 billion by 2.1%.
LULU Cuts Outlook as Q3 Starts SlowlyInterim Co-CEO and CFO Meghan Frank said the third quarter began slowly. Management therefore built a more cautious view into its second-half forecast.
LULU expects third-quarter revenues of $2.29 billion to $2.32 billion, down 10% to 11%. Earnings are projected at 93 cents to 98 cents per share.
North America revenues are expected to decline in the mid-teens. For fiscal 2026, management cut revenue guidance to $10.35 billion to $10.50 billion and earnings guidance to $9.48 to $9.73 per share.
lululemon Sees Traffic and Product FrictionFrank said traffic is the biggest source of pressure in North America and China Mainland. Conversion is also down year over year, although it has not worsened further.
North America revenues declined 8% in Q2. China Mainland reported revenues rose 4% but fell 2% in constant currency amid brand sentiment issues, a softer Tmall 618 event and weaker product newness.
Product performance remained uneven. Frank said leggings sales fell approximately 20%, while accessories declined 13%, leaving newer silhouettes unable to fully offset weakness in core categories.
LULU Chases Winners and Trims AssortmentsManagement is leaning harder on faster replenishment where demand is strongest. Frank said the company is chasing approximately 20% more volume this year than last year.
Women’s away-from-body styles including Groove Wide-Leg, Align Foldover Jogger and the updated Dance Studio Pant are performing well. Define, Scuba, selected men’s golf tops and Metal Vent Tech tees were also cited as strengths.
Interim Co-CEO, president and chief commercial officer Andre Maestrini said store SKUs have been reduced 15% in North America. LULU is also testing localized assortments, new fixtures and activity-based merchandising.
lululemon Steps Up Brand SpendingFrank said increased marketing investment will continue in the back half despite softer sales. Spending is focused on brand building, community activations, creators, social content and product consideration.
Management cited strong engagement around the summer yoga series and SeaWheeze. Frank said those efforts have not yet changed the top-line trajectory, but the response supports continued investment.
In China, Maestrini said the priority is rebuilding brand consideration and organic traffic. The plan centers on store activations, a Tmall Super Brand Day and wellness events rather than broad promotional activity.
LULU Faces Cost and Store Scrutiny in Q&AA Wells Fargo analyst asked whether the cost structure can adjust quickly enough if sales stay weak. Frank said LULU is taking a deeper look across the business while protecting product and brand investment.
Management is tightening travel, professional fees, store labor hours and headcount growth. It is also pursuing supply-chain, procurement and technology efficiencies while reducing its fiscal 2026 net new store target to approximately 35 from about 40.
A Morgan Stanley analyst asked about store rationalization and assortment changes. Frank said every real estate deal is being scrutinized, while Maestrini emphasized lower SKU density and more curated stores.
lululemon Enters Leadership TransitionFrank said incoming CEO Heidi O’Neill will join next week and review strategy and the current action plan. In the meantime, management is focused on execution, tighter expenses and faster reaction to demand.
The call’s tone remained cautious. Management emphasized restoring full-price sales, improving brand sentiment and sharpening product relevance, while its guidance assumes no benefit from a near-term business inflection.
LULU's Zacks Signals Stay MixedLULU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Its Value Score of A, Growth Score of B and VGM Score of A are favorable, while its Momentum Score of C is less supportive.
The Style Scores framework places the strongest emphasis on A or B scores when paired with Zacks Rank #1 or #2 stocks. A Zacks Rank #3 can still be held, and the Rank can change as analyst estimates are revised after the newly reported results.
Lululemon (LULU) shares slid below $100 for the first time since 2018 after the company showed no "bright spots" in its report, according to Marley Kayden. The company cutting its outlook yet again does no favors for forward momentum as comp.
LULU's Q2 EPS beat estimates as tariff refunds boost margins, but softer demand and lower sales pressure the outlook as sales trends remain challenged.
While the company’s third-quarter guidance of a 60% year-on-year decline in earnings could prove conservative, the implied fourth-quarter earnings "may not be conservative enough," according to Guggenheim Securities.
The Lululemon Athletica Analyst: Analyst Simeon Siegel reaffirmed a Neutral rating on the stock.
The Lululemon Athletica Thesis: The company reported its second-quarter sales below expectations, with North America declining 8.5% year-on-year and the U.S. down for the fifth consecutive quarter, Siegel said in the note.
Check out other analyst stock ratings.
Although Lululemon Athletica’s gross margin improved by around 200 basis points (bps) to 60.5%, this included a tariff refund benefit of around 560bps, the analyst stated.
The company’s sales and gross margin contraction of 355 bps (excluding tariff refunds) were the worst-performing in the industry, he added.
Outlook: Lululemon Athletica’s U.S. brand was "meaningfully overstretched, well above our $3 billion-$4 billion Industry-wide Domestic Brand Saturation level," Siegel wrote. While management guided to third-quarter sales significantly below Street expectations, the company’s "domestic revenue has only begun to reset," the analyst stated.
The sales guidance "doesn’t internalize a deep enough cut looking further out," which sparks concerns around the latest outlook just being one of a "thousand cuts," he added.
The third-quarter earnings guidance reflects a 60% year-on-year decline and the full-year guidance excluding tariff refunds shows earnings declining by around 35%, Seigel noted.
While the third-quarter earnings guidance is likely conservative, there is downside to fourth-quarter earnings, the analyst said.
Although Lululemon Athletica is a strong brand, has a loyal customer base and is among the largest revenue levels of any brand in history, "we believe it is simply too large and still likely both over-selling and over-earning," he further wrote.
LULU Price Action: Shares of Lululemon Athletica had declined by 17.60% to $100.34 at the time of publication on Friday.
Lululemon Athletica Inc (NASDAQ:LULU) is down 17.7% at $100.25, trading at eight-year lows after the retailer issued disappointing current-quarter and full-year guidance.
Shares of Lululemon Athletica (Nasdaq: LULU) are down more than 20% in premarket trading on Friday.
The plunge follows a disappointing second quarter earnings report, released by the Canadian apparel company on Thursday.
Lululemon’s revenue fell 4% year-over-year (YOY) to $2.4 billion. It failed to meet the company’s predicted 2% to 3% decline, “with the shortfall driven predominantly by China Mainland,” Lululemon interim CEO Meghan Frank said in a post-earnings call.
China saw a 4% growth YOY—though a 2% decline when looking at constant dollars—but failed to meet the retailer’s expectations. Meanwhile, revenue fell 8% YOY in the U.S., though the figure was still better than the company’s prediction.
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DownbeatAs for China, all it takes is looking at quarter one’s growth to see how bad 4% is. Last quarter, Lululemon had a 30% jump YOY in China’s revenue, holding at 23% in constant dollars.
Then, less than a month after quarter two began, Lululemon made a very public fumble.
On May 30, the company hosted a yoga festival on the Great Wall of China. The event’s 2,000 guests were welcomed to what was supposed to be a celebration of Chinese culture. That celebration featured a drum circle with Chinese actor Zhu Yilong.
Lululemon just cut guidance for the second time this year and the stock cratered below $100, but at least one famous contrarian investor sees a generational buying opportunity in the wreckage while analysts warn the pain is far from over.
Shares of Lululemon Athletica (NASDAQ:LULU | LULU Price Prediction) are down 20% to $97.85 in Friday morning trading after the athletic-apparel retailer released Q2 FY2026 results and slashed its full-year outlook for the second time this year. The selloff caps a brutal stretch for a name that was down 41% year to date (YTD) through Thursday’s close at $121.77, after rising 1% Thursday ahead of the release.
Retail is broadly holding up while athletic apparel takes the brunt of the selling. Lululemon’s guidance cut describes weaker demand for its own brand, and that distinction matters for how other names in the group trade Friday.
Sitting under the day’s action is a live debate: the same guidance cut that broke Lululemon stock also pushed it into the range Michael Burry publicly named as his buy level. That tension frames the tape.
Second Guidance Cut Breaks the Stock Lululemon reported Q2 comparable sales down 10%, with North America comps falling 12% and leggings sales down 20%, a drop in what remains the company’s signature category. Lululemon slashed full-year EPS guidance to $9.48 to $9.73, from a prior $10.95 to $11.15, and Lululemon’s Q3 revenue guidance implies a 10% to 11% year-over-year decline. Interim co-CEO Meghan Frank framed the update as a prudent recalibration given softer traffic and inconsistent new-product response entering the second half.
Management stated Q3 “has gotten off to a slow start” and pointed to negative brand commentary in North America and China as added pressures. Jefferies analyst Randy Konik was less generous, stating, “There are plenty more lemons to squeeze before this one turns.” His view captures what a cut of that size implies: the reset isn’t finished, and the second half likely gets worse before it gets better.
Beneath the top line, Lululemon’s Q2 revenue came in at $2.42 billion, missing estimates. Gross margin looked healthier at 60.5%, but the reported result included a one-time International Emergency Economic Powers Act (IEEPA) tariff refund that added 86 cents to EPS. Strip that benefit out and the underlying quarter looks materially softer than the reported figures suggest.
Burry’s Fat Pitch Below $100 Michael Burry took the other side in a Substack post Friday morning. Burry called Lululemon stock a “fat pitch” below $100 and said he plans to buy more shares. He pointed to $1.3 billion in cash and no financial debt as downside protection while the brand works through its issues, according to Substack.
Burry estimated 15% to 20% annual returns over 15 to 20 years if Lululemon returns to growth, a long-dated bet resting entirely on the turnaround. Lululemon named Heidi O’Neill as incoming CEO on April 22, with a start date of September 8. Interim co-CEOs Frank and André Maestrini have run the company across that gap, and the business deteriorated meaningfully during that stretch, which is the structural fact sitting underneath both the bull and bear reads.
The catch is the timing. Buying below $100 gives investors optionality on a turnaround, but the balance sheet doesn’t fix the traffic problem management flagged in North America, according to Substack. Burry is essentially paying today for a brand recovery that hasn’t started, betting the incoming leader can execute a reset with the cash cushion Lululemon still has intact.
Peers and the Retail Tape Nike (NYSE:NKE) was down 38% YTD through Thursday’s close, weighed by weak Nike Sportswear demand and a Greater China reset that CEO Elliott Hill has described as multi-quarter. Meanwhile, Dick’s Sporting Goods (NYSE:DKS) was down 29% after CEO Lauren Hobart flagged “growing pressure across portions of the athletic footwear and apparel marketplace” at the company’s August update.
The sector picture tells the same story at the tape level. The SPDR S&P Retail ETF (NYSEARCA:XRT) was up 2% over the same period, a spread that isolates the pain in athletic apparel. Reddit sentiment on Lululemon flipped from bullish earlier in the week to bearish by Thursday afternoon, with a thread titled “phone Burry” dominating discussion into Friday.
What to Watch Next Heidi O’Neill takes the helm September 8, and her early strategic signals set the tone for how the turnaround gets framed. The bull case rests on execution under a leader who hasn’t yet arrived, and the bear case rests on the guidance Lululemon just cut, which flags a demand problem.
Investors sizing new positions in Lululemon shares can watch for whether O’Neill offers a clear reset framework before the Q3 report. Given the range of outcomes and the CEO gap, keeping their exposure modest until the trajectory clarifies is a reasonable approach.
Contact [email protected] for any questions or corrections.
Lululemon Athletica Inc (NASDAQ:LULU) posted mixed financial results for the second quarter after the closing bell on Thursday.
Lululemon reported second-quarter revenue of $2.42 billion, missing the consensus estimate of $2.46 billion, according to Benzinga Pro. The athletic and leisure apparel company reported second-quarter earnings of $2.92 per share, which may not compare to estimates.
Lululemon lowered its full-year revenue outlook from a range of $11 billion to $11.15 billion to a new range of $10.35 billion to $10.50 billion, versus estimates of $11.04 billion. The company also lowered its full-year earnings guidance from a range of $10.95 to $11.15 per share to a new range of $9.48 to $9.73 per share, versus estimates of $10.96 per share.
"Our teams remain focused on accelerating growth by strengthening our product offerings, increasing our marketing investments, and maintaining disciplined expense management," said Meghan Frank, interim co-CEO and CFO of Lululemon.
Lululemon shares fell 20.3% to $97.00 in pre-market trading.
These analysts made changes to their price targets on Lululemon following earnings announcement.
Bernstein analyst Aneesha Sherman maintained the stock with a Market Perform and lowered the price target from $145 to $115. JP Morgan analyst Matthew Boss maintained the stock with a Neutral and lowered the price target from $154 to $95. Guggenheim analyst Simeon Siegel reiterated the stock with a Neutral rating. Keybanc analyst Ashley Owens reiterated the stock with a Sector Weight rating. Trending
Considering buying LULU stock? Here’s what analysts think:
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The athletic-apparel maker is losing momentum in the Americas just as new CEO Heidi O'Neill prepares to take over Summary
Second-quarter revenue fell 4% to $2.42 billion
Athletic-apparel retailer Lululemon Athletica Inc. (LULU, Financials) is in one of the roughest patches in recent history, with shares plunging to an eight-year low on the heels of disappointing second-quarter earnings. Revenue of $2.42 billion was down 4% from a year ago. Comparable sales were down 9%.
Comparables sales were down 12% and the decline was more pronounced in the Americas. International sales nevertheless rose 4%, but it wasn't enough to offset the slump in Lululemon's biggest market. Profitability also went down. Operating margin dropped to 18.8% from 20.7% a year ago.
Even stated earnings saw an extraordinary rise. Diluted earnings were $2.92 per share but tariff refunds and related interest contributed $0.86 per share. The real worry is what happens next.
Lululemon now projects full-year revenue of $10.35 billion to $10.50 billion, down 5% to 7% from last year and considerably below its previous prediction of $11 billion to $11.15 billion. Revenue likely to drop another 10 to 11 percent in the third quarter
That provides little room for error for incoming CEO Heidi O'Neill when she takes office Sept. 8. She inherits waning North American demand, product issues and a stock that has already reset substantially lower.
The next catalyst will be if O'Neill can steady the Americas business and gain product momentum before the holiday season.
Also See:
List of 52-Week Lows, 52-Week Highs List of 3-Year Lows, 3-Year Highs List of 5-Year Lows, 5-Year Highs Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Lululemon Athletica Inc (NASDAQ:LULU) shares fell 17% in early Friday trading after the athletic apparel retailer reported weaker comparable sales and cut its full-year guidance.
Second-quarter revenue was $2.4 billion, down 4% year-over-year and below the $2.46 billion estimate, with comparable sales down 9%. EPS of $2.92 included a $0.86 tariff-refund benefit. Gross margin rose 200 basis points to 60.5%, boosted by $134.5 million in tariff refunds.
Operating income of $453.7 million beat estimates but fell 13% year-over-year, and operating margin contracted 190 basis points to 18.8%.
For fiscal 2026, Lululemon now guides revenue of $10.35 billion to $10.5 billion, versus an $11.04 billion estimate, and EPS of $9.48 to $9.73, versus $10.88 estimated. Third-quarter guidance of $2.29 billion to $2.32 billion in revenue and $0.93 to $0.98 in EPS also came in well below Street estimates.
Bank of America said the reset leaves no clear line of sight to an inflection point, citing a second-quarter miss in China and continued weakness in North America. The bank kept its Neutral rating, cut EPS estimates, and lowered its price objective to $122 from $140, while noting incoming CEO Heidi O'Neill, who starts next week, could signal a strategy shift on the next earnings call.
China Mainland comps fell 8%, well short of guidance, hurt by weak traffic tied to social media backlash over a Great Wall marketing event and a soft Tmall 618 event. North America comps dropped 12%, with leggings sales down 20% as shoppers shift toward away-from-body silhouettes.
Bank of America expects North American trends to worsen in the third quarter, partly because continued store openings and marketing spend will drive 1,050 basis points of margin decline, easing to about 240 basis points of pressure in the fourth quarter as tariff impacts lap. The bank noted $105 million in tariff refunds not yet reflected in guidance.
Summarylululemon athletica inc. faces intensifying revenue declines, missing Q2 estimates and guiding for its first full-year revenue drop since going public.Americas weakness deepened with 8% revenue and 12% comp sales declines; international growth stalled, notably with China revenues down 2%.Q2 EPS beat was driven by $134.5M in tariff refunds, masking underlying margin and profitability deterioration.I reiterate a Sell rating for LULU due to worsening fundamentals, negative forward guidance, and an unattractive risk-reward profile despite a low valuation.Looking for a portfolio of ideas like this one? Members of The REIT Forum get exclusive access to our subscriber-only portfolios. Learn More » Getty Images
Introduction & Investment Thesis lululemon athletica inc. (LULU) plunged another 20% after its Q2 FY26 earnings yesterday.
I had downgraded lululemon to a Sell in my previous post in July, after management severely slashed their forward revenue expectations
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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Index Dow Jones -0,21 % na 53571,45 b. S&P 500 -0,12 % na 7738,27 b. Nasdaq Composite -0,03 % na 26575,97 b.
Přední americké indexy se obchodují v červených číslech. Před otevřením trhu byly reportovány srpnové hodnoty z trhu práce ve Spojených státech, které indikují, že trh práce je nadále silný. Z indexu S&P500 zaznamenávají největší pokles akcie společnosti Fair Isaac Corp (-20 %), když ředitel Federální agentury pro financování bydlení nařídil společnostem Fannie Mae a Freddie Mac, aby všem věřitelům povolil používání VantageScore, čímž podle agentury Bloomberg fakticky ukončil dlouholetý monopol společnosti. Po výsledkovém reportu se nedaří akciím Lululemon Athletica (-16 %). Trhy zklamalo především snížení celoročního výhledu tržeb a ziskovosti. Nově projektuje čisté tržby v rozmezí 10,35-10,50 mld. USD, analytický konsensus byl nastaven na 11,03 mld. USD. Zisk na akcii je projektován ve výši 9,48 až 9,73 USD, očekávalo se 10,84 USD. Ztrácí také softwarová společnost Adobe (-7,6 %), která jmenovala nového generálního ředitele.
Index S&P 500 -0,12 % na 7738,27 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Informační technologie +0,6 % Energie -1,3 % Průmysl +0,4 % Zbytná spotřeba -1,2 % Utility +0 % Zdravotní péče -0,7 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Coherent Corp (COHR) +5,7 % Fair Isaac Corp (FICO) -20 % KLA Corp (KLAC) +5,6 % Lululemon Athletica (LULU) -16 % Seagate Technology Holdings (STX) +5,5 % Equifax (EFX) -8,3 % Teradyne (TER) +5,3 % Adobe (ADBE) -7,6 % Western Digital Corp (WDC) +5,2 % Autodesk (ADSK) -6,7 % Zdroj: Bloomberg
While Michael Burry’s recent shorts have arguably taken the bulk of the attention due to being explicit bets against the artificial intelligence (AI) boom, his largest long position has also been controversial on account of its poor performance in 2026.
The early morning of September 4 only sharpened the critique of the legendary ‘Big Short’ trader since Lululemon Athletica (NASDAQ: LULU) – his biggest bullish bet – suffered a severe 19.22% drop from $121.77 at the closing bell to $98.37 at press time.
Simultaneously, the equity recorded a significant negative milestone as the extended session sent it to eight-year lows: LULU shares haven’t been below $100 since 2018.
Still, Michael Burry apparently remains confident regarding his stock pick since he, despite acknowledging the firm’s many issues over the years, declared he would be buying more while the price is below the $100 mark.
Why Lululemon stock just plunged 19%% overnight Meanwhile, Lululemon stock’s latest drop was driven by an earnings miss and disappointing guidance – both unveiled after the evening bell on September 3.
Specifically, along with some uncertainty regarding how the $2.92 earnings per share (EPS) should be compared to the forecasted $1.79, the firm missed the $2.46 revenue estimate and disclosed $2.42 instead, and gross profit decreased 1% while its gross margin grew 5.6%.
Perhaps more damningly, Lulumenon revealed it anticipates revenue in the third quarter (Q3) to be in the range between $2.29 billion and $2.32 billion – below the Q2 sales and up to 11% under the same period in the previous year – and that sales for the entire year will be between $10.35 billion and $10.5 billion: up to 7% less than in the previous.
Reacting to the recorded and anticipated weakness, Burry remarked on his past long positions that spent years in the red before ultimately giving him the opportunity to make a profit.
In this context, the famous ‘Big Short’ trader reflected on his Avanti investment early in the century and how he entered the position while the equity was at roughly $12, continued buying the downturn to $2 per share, and eventually saw the company acquired at $22.
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Lululemon Athletica (LULU) fell about 15% in early Friday after its fiscal second-quarter results missed expectations and the company reduced its full-year sales outlook.
The sharp decline also affected investor Michael Burry (Trades, Portfolio), whose position in the athleticwear retailer represents about 17.4% of his portfolio. Burry said he still owns the shares and could add to his position should the stock fall below $100.
Burry had anticipated a weak quarter and described Lululemon as a “trickster,” while noting that the company has faced periods of stress before. He said his approach is to either increase a position after a decline or exit it.
The earnings setback reflects weaker demand in China and increasing competition in the U.S. The company also posted a larger-than-expected sales decline, prompting another reduction to its annual outlook.
Interim co-CEO Meghan Frank said management is focusing on product development, higher marketing investment and expense control as it works to restore growth.
Burry's willingness to buy below $100 may offer some support, but weaker sales and reduced guidance remain key risks.
Tariff refunds of $134.5 million added $0.86 per share to the quarter Summary
Lululemon reported diluted EPS of $2.92 on $2.42 billion revenue, with full year revenue cut to up to $10.50 billion.
Lululemon Athletica inc. LULU fell 18.14% premarket after reporting second-quarter net revenue of $2.42 billion, down 4%, and comparable sales down 9%. Analysts had expected $2.46 billion. Diluted EPS came in at $2.92 against $3.10 a year earlier. That figure includes $0.86 from International Emergency Economic Powers Act tariff refunds of $134.5 million, which also lifted gross margin by 560 basis points and operating margin by the same amount.
Americas revenue fell 8% and comparable sales dropped 12%, while international revenue rose 4%. Operating income declined 13% to $453.7 million and operating margin narrowed 190 basis points to 18.8%, with selling, general and administrative expenses climbing to 41.7% of revenue from 37.7%. Interim CEO Meghan Frank told analysts the response to product launches remains inconsistent, citing pressure in both of the company's largest markets.
Third-quarter revenue is now expected between $2.29 billion and $2.32 billion, a decline of 10% to 11%. Full-year revenue guidance dropped to a range of $10.35 billion to $10.5 billion from $11 billion to $11.15 billion, with EPS cut to between $9.48 and $9.73 from $10.95 to $11.15. Incoming CEO Heidi O'Neill starts next week.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Buy Alo Yoga (private) exposure via public comps: long Vuori (if listed) or use a proxy basket of premium athleisure winners with stronger traffic trends; in practice, rotate into brands showing better demand resilience versus LULU’s weakening leggings category. The news implies share shift from LULU to challengers and away-from-body styles—so the second-order effect is margin and growth pressure spreading to LULU’s premium pricing power.
Key Risk: Challengers’ growth slows too (category-wide demand drop), and LULU’s brand rebounds faster than peers.
LULU short
Sell short Lululemon (LULU). Earnings showed comparable sales -9%, revenue outlook cut, and leggings sales down ~20% as shoppers move to looser silhouettes—clear product authority erosion. Competition (Alo, Vuori, Skims) plus more promotions and weaker traffic/card spending means the market will keep discounting the brand until full-price demand returns, not just “better replenishment.”
Key Risk: They quickly restore full-price traffic and assortment demand (not just mix), proving this is a temporary product cycle and guidance stabilizes next quarter.
For years, Lululemon could sell premium leggings with pricing power and customer loyalty most apparel companies envied. Its latest quarter suggests that advantage is being tested.
Revenue fell 4% to $2.42 billion in fiscal Q2, comparable sales dropped 9%, and the company cut its full-year revenue outlook to $10.35 billion to $10.5 billion, implying a 5% to 7% decline. LULU sank as much as 20% after hours.
More worrying was the product signal. Management said leggings sales fell about 20% as shoppers shifted towards looser silhouettes, raising a bigger question about whether Lululemon has lost some of its product authority.
Lululemon remains financially healthy, which makes the weakness harder to dismiss as a balance-sheet issue.
Morningstar senior equity analyst David Swartz told Yahoo Finance after the results that the company has “no real financial problems” and that “the problem is with the sales growth.”
Swartz said shoppers have seen similar colours, leggings and styles too often, while stronger competition from Alo Yoga, Vuori, Skims and traditional athletic brands has given customers more choice.
The quarter supports that concern. Americas revenue fell 8%, while international revenue rose only 4%, offering less of an offset than investors had become accustomed to.
The issue therefore looks operational rather than purely macroeconomic. Lululemon still has a premium brand, but customers are not responding strongly enough to the current merchandise.
Truist analyst Joseph Civello downgraded Lululemon to Sell in July and warned that the company’s headwinds could prove “more structural” than Wall Street was assuming.
His concern was that challenger brands were gaining traction even in a difficult consumer environment.
Goldman Sachs analyst Brooke Roach also lowered her target to $111 from $122 before earnings.
The firm cited weakening card spending, traffic and sentiment, elevated promotions and moderating growth in China as reasons stabilisation was becoming harder to forecast.
Bernstein analyst Aneesha Sherman has framed the risk more starkly.
She previously asked whether Lululemon was dealing with a product issue that could be fixed within a year or a brand problem that could weigh on sales and valuation for much longer.
Heidi O’Neill takes over as chief executive on September 8 after a long career at Nike, including senior roles in product and women’s apparel.
Swartz told Yahoo Finance that her product-development background could be well suited to Lululemon’s current problem because the company needs improvement in merchandise, not financial stability.
Management is already lowering expectations. Lululemon now plans about 35 new stores this year rather than 40, while its annual revenue forecast has been cut sharply from the $11 billion to $11.15 billion range issued only a few months ago.
There are still reasons for optimism. Newer away-from-body products, including wide-leg styles, are gaining traction, and management is increasing replenishment of items that are selling well.
But the turnaround now has to prove that those early successes can restore traffic and full-price demand across the broader assortment.
Total Net Revenue: Decreased 4% (or 5% in constant currency) to $2.4 billion for Q2 2026.Comparable Sales: Decreased 10% globally.North America Revenue: Decreas
Shares of Lululemon Athletica (LULU.O) fell about 18% in premarket trading on Friday after the sportswear maker cut its full-year forecast for a second time, underscoring the string of challenges that await incoming CEO Heidi O'Neill.
Known for its high-priced stretchy pants and athletic tops, Lululemon has struggled to contain shrinking margins, worsening brand perception and market-share loss to new rivals. O'Neill, who takes over on September 8, will have to chart a recovery for a company hit by merchandising missteps, an over-reliance on promotions and intensifying competition.
The firm's shares were trading at about $99 before the bell, and if losses hold, Lululemon would lose more than $2.5 billion in market value, deepening the stock's year-to-date decline to about 41.5%.
"In our view, last night's decidedly downbeat quarterly announcement is now apt to unnerve meaningfully even longer-term-oriented investors examining the name," said Brian Nagel, analyst at Oppenheimer Research, in a note.
Investors should await an initial game plan from O'Neill before considering a more constructive stance on shares, he added.
O'Neill, a former Nike executive, will be tasked with reviving demand in North America, Lululemon's largest market, and restoring growth.
Revenue in the Americas fell 8% from a year earlier in the second quarter, compared with a 1% increase the previous year, as the firm struggled to reignite demand amid slow consumer spending impacted by inflationary pressures.
Sales could deteriorate further in the second half, Morgan Stanley said, with limited visibility on when demand might recover, raising the risk of continued pressure on margins.
Following the results, at least 12 brokerages lowered their price objectives for the shares, with Piper Sandler setting the Street-low target of $80, according to data compiled by LSEG.
Lululemon's shares trade at about 11.50 times forward earnings, compared with 20.76 for peers Nike (NKE.N) and 13.41 for Adidas (ADSGn.DE).
With U.S. stock futures trading mixed this morning on Friday, some of the stocks that may grab investor focus today are as follows:
UiPath Inc (NYSE:PATH) reported mixed results for the second quarter and raised its FY27 sales guidance. Planet Labs reported quarterly losses of three cents per share, which missed the consensus estimate for losses of two cents, per Benzinga Pro data. Quarterly revenue came in at $116.05 million, which beat the Street estimate of $104.12 million The company also promoted Hitesh Ramani to CFO. UiPath shares fell 7.7% to $16.81 in the after-hours trading session. American Outdoor Brands, Inc. (NASDAQ:AOUT) announced better-than-expected first-quarter fiscal 2027 results. American Outdoor Brands shares jumped 25.5% to $12.56 in the after-hours trading session. Lululemon Athletica Inc (NASDAQ:LULU) posted mixed financial results for the second quarter after the closing bell on Thursday. Lululemon lowered its full-year revenue outlook from a range of $11 billion to $11.15 billion to a new range of $10.35 billion to $10.50 billion, versus estimates of $11.04 billion. The company also lowered its full-year earnings guidance from a range of $10.95 to $11.15 per share to a new range of $9.48 to $9.73 per share, versus estimates of $10.96 per share. Lululemon shares dipped 18.2% to $99.65 in the after-hours trading session. Check out our premarket coverage here
Zscaler Inc (NASDAQ:ZS) reported better-than-expected financial results for the fourth quarter of fiscal 2026 and issued strong guidance for fiscal 2027. Zscaler shares fell 2.1% to $174.00 in after-hours trading. Docusign Inc (NASDAQ:DOCU) posted upbeat financial results for the second quarter of fiscal 2027 and raised its fiscal 2027 revenue outlook. Docusign shares gained 3.8% to $68.45 in the after-hours trading session. Photo via Shutterstock
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lululemon athletica inc. (LULU) Q2 2026 Earnings Call September 3, 2026 4:30 PM EDT
Company Participants
Howard Tubin - Vice President of Investor Relations
Meghan Frank - Interim Co-CEO & CFO
Andre Maestrini - Interim Co-CEO, President & Chief Commercial Officer
Conference Call Participants
Alexandra Straton - Morgan Stanley, Research Division
Irwin Boruchow - Wells Fargo Securities, LLC, Research Division
Matthew Boss - JPMorgan Chase & Co, Research Division
Lorraine Maikis - BofA Securities, Research Division
Michael Binetti - Evercore ISI Institutional Equities, Research Division
Paul Lejuez - Citigroup Inc., Research Division
Adrienne Yih-Tennant - Barclays Bank PLC, Research Division
Dana Telsey - Telsey Advisory Group LLC
Mark Altschwager - Robert W. Baird & Co. Incorporated, Research Division
Presentation
Operator
Thank you for standing by. This is the conference operator. Welcome to the lululemon athletica inc. Second Quarter 2026 Earnings Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions]
I would now like to turn the conference over to Howard Tubin, Vice President, Investor Relations for lululemon athletica. Please go ahead.
Howard Tubin
Vice President of Investor Relations
Thank you, and good afternoon. Welcome to lululemon's second quarter earnings conference call. Joining me today are Meghan Frank, Interim Co-CEO and CFO; and Andre Maestrini, interim Co-CEO, President and Chief Commercial Officer.
Before we get started, I'd like to take this opportunity to remind you that our remarks today will include forward-looking statements reflecting management's current forecast of certain aspects of lululemon's future. These statements are based on current information, which we have assessed, but by which its nature is dynamic and subject to rapid and even abrupt changes. Actual results may differ materially from those contained in or implied by these forward-looking statements due to risks and uncertainties associated with our business, including those we have disclosed in our most recent filings with the SEC including our annual report on Form 10-K
Lululemon (LULU - Free Report) came out with quarterly earnings of $2.06 per share, beating the Zacks Consensus Estimate of $1.79 per share. This compares to earnings of $3.1 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +15.08%. A quarter ago, it was expected that this athletic apparel maker would post earnings of $1.67 per share when it actually produced earnings of $1.69, delivering a surprise of +1.2%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Lululemon, which belongs to the Zacks Textile - Apparel industry, posted revenues of $2.42 billion for the quarter ended July 2026, missing the Zacks Consensus Estimate by 2.07%. This compares to year-ago revenues of $2.53 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Lululemon shares have lost about 42.2% since the beginning of the year versus the S&P 500's gain of 12%.
What's Next for Lululemon?While Lululemon has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Lululemon was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.52 on $2.56 billion in revenues for the coming quarter and $10.93 on $11.08 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Textile - Apparel is currently in the top 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, Cintas (CTAS - Free Report) , has yet to report results for the quarter ended August 2026.
This uniform rental company is expected to post quarterly earnings of $1.35 per share in its upcoming report, which represents a year-over-year change of +12.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Cintas' revenues are expected to be $2.97 billion, up 9.2% from the year-ago quarter.
lululemon athletica inc. faces severe de-rating after weak Q2 results, with a 19% post-earnings selloff and single-digit valuation multiples. LULU's Q2 revealed a 4% revenue decline, -10% comparable sales, and a significant 8% drop in Americas sales, highlighting competitive and macro headwinds. EPS outperformance was driven by one-off tariff refunds; underlying margins and earnings are notably weaker than headline results suggest.
For the quarter ended July 2026, Lululemon (LULU - Free Report) reported revenue of $2.42 billion, down 4.3% over the same period last year. EPS came in at $2.06, compared to $3.10 in the year-ago quarter.
The reported revenue compares to the Zacks Consensus Estimate of $2.47 billion, representing a surprise of -2.07%. The company delivered an EPS surprise of +15.08%, with the consensus EPS estimate being $1.79.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Lululemon performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Number of Stores Open at the End of the Quarter: 825 versus 829 estimated by six analysts on average.Total Gross Square Feet at the End of the Quarter: 3,880.00 Ksq ft compared to the 3,869.68 Ksq ft average estimate based on five analysts.Comparable Sales - Total (Change in constant dollars): -10% compared to the -5.6% average estimate based on five analysts.Comparable Sales - Total (Change): -9% compared to the -5.4% average estimate based on four analysts.Geographic Revenues- China Mainland: $407.1 million versus the seven-analyst average estimate of $465.91 million. The reported number represents a year-over-year change of +3.6%.Geographic Revenues- Rest of World: $391.76 million versus $417.53 million estimated by seven analysts on average. Compared to the year-ago quarter, this number represents a +4.7% change.Geographic Revenues- Americas: $1.62 billion versus the seven-analyst average estimate of $1.58 billion. The reported number represents a year-over-year change of -8%.Geographic Revenues- United States: $1.3 billion compared to the $1.27 billion average estimate based on three analysts. The reported number represents a change of -8% year over year.Geographic Revenues- Canada: $285.82 million versus the three-analyst average estimate of $298.6 million. The reported number represents a year-over-year change of -11%.Net Revenue by Channel- Company-operated stores: $1.17 billion versus the six-analyst average estimate of $1.18 billion. The reported number represents a year-over-year change of -6.5%.Net Revenue by Channel- Other channels: $307.25 million versus the five-analyst average estimate of $292.79 million. The reported number represents a year-over-year change of +10.9%.Net Revenue by Channel- E-commerce: $934.63 million compared to the $986.67 million average estimate based on five analysts. The reported number represents a change of -5.9% year over year.View all Key Company Metrics for Lululemon here>>>
Shares of Lululemon have returned -2.8% over the past month versus the Zacks S&P 500 composite's +2.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
China’s Athleisure Boom Is Not Lifting Every Brand Equallylululemon athletica NASDAQ: LULU reported second-quarter revenue and earnings that fell below its expectations, citing weaker traffic, inconsistent product launches and pressure on brand sentiment in North America and China Mainland. The company lowered its full-year outlook and said it is increasing marketing investment while tightening expenses and inventory management.
Total second-quarter net revenue declined 4% year over year, or 5% on a constant-currency basis, to $2.4 billion. Comparable sales fell 10%. Net income was $329 million, or $2.92 per diluted share, compared with $3.10 per share in the prior-year quarter. Tariff refunds and associated interest added $0.86 per share to quarterly earnings, the company said.
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Regional weakness drives revenue decline Premium Retail’s Stress Test Is Separating Winners From LosersNorth America revenue declined 8% in the second quarter, with comparable sales down 12%. U.S. revenue fell 8%, while Canada revenue declined 11% on a reported basis, or 9% in constant currency.
China Mainland revenue rose 4% on a reported basis but declined 2% in constant currency, while comparable sales fell 8%. Interim Co-CEO and CFO Meghan Frank said the company faced negative media and social-channel commentary beginning late in the first quarter and early in the second quarter. That was compounded by commentary following the company’s first-quarter call regarding an event held at the Great Wall of China.
From Quantum to Clothing: Insider Trades Hit 3 Big NamesInterim Co-CEO, President and Chief Commercial Officer André Maestrini said those factors hurt traffic in stores and digital channels. E-commerce was also affected by Tmall’s decision not to repeat its 618 Shopping Festival in the same manner as the prior year, as well as lululemon’s decision not to participate in promotions following the event.
Revenue in the company’s rest-of-world segment, consisting of EMEA and APAC, increased 5%, or 6% in constant currency, while comparable sales declined 3%. Maestrini said South Korea remained one of the company’s strongest markets, while Australia has become increasingly promotional. Lululemon has not joined those promotional events, which he said has slowed guest purchase behavior.
Product trends remain mixed Frank said women’s leggings sales declined approximately 20% during the quarter, a greater-than-expected slowdown in a core category. While the company remains committed to leggings and described itself as the category’s market leader, it is seeing consumer demand shift toward away-from-body silhouettes.
The company cited favorable performance from newer styles including Groove Wide-Leg, Align Foldover Jogger, Breezily and an updated Dance Studio Pant. Other products performing well included the Define franchise, Scuba and Steady State tops in the company’s SuperLoft fabric, men’s Metal Vent Tech tees and golf tops. The golf assortment also supported sales of ABC bottoms, management said.
Men’s revenue declined about 1% during the quarter, women’s revenue declined 4%, and accessories and other revenue fell 13%. While backpacks remained strong, the company reported softness in bags and said it is editing its accessories assortment to better align with its future brand vision.
Frank said lululemon is increasing its use of chase capabilities to replenish stronger-performing products, with approximately 20% more volume being chased this year than last year. The company is also working to reduce SKUs, manage future inventory flows and shorten product-development lead times.
Marketing and store actions target traffic and conversion Management identified traffic as the largest driver of pressure across North America and China, while noting that conversion was also negative year over year but had not worsened. The company plans increased marketing investment in the second half, particularly in mid-funnel creator and social content, community events and athlete-focused storytelling.
Lululemon pointed to engagement from its summer yoga series across 70 U.S. and Canadian cities and the return of its SeaWheeze Half Marathon and Festival in Vancouver. The SeaWheeze event drew nearly 10,000 runners from 24 countries, while a related virtual Strava challenge attracted more than 85,000 participants across 120 countries. The company said it will bring the event back next summer.
In stores, Maestrini said lululemon has reduced SKU density by 15% and is rolling those changes across the North American fleet. The company is also testing more curated assortments, new fixture packages, additional imagery and activity mannequins in a smaller group of locations. Digital efforts include redesigned home and category-detail pages, with a product-detail-page update planned in the coming weeks.
Margins and outlook revised lower Second-quarter gross margin expanded 200 basis points to 60.5%, helped by 560 basis points from IEEPA tariff refunds. Excluding the refund, product margin was affected by tariff costs and higher markdowns. Operating income totaled $454 million, or 18.8% of revenue, compared with 20.7% a year earlier.
SG&A expenses rose to 41.7% of revenue from 37.7%, reflecting fixed-cost deleverage, investments in guest experience and marketing, and proxy-contest fees. The company said it is taking a more aggressive approach to cost management, including supply-chain efficiencies, non-merchandise procurement, automation, travel, professional fees, store labor hours and moderation of headcount growth.
Lululemon ended the quarter with $1.4 billion in cash and cash equivalents. Inventory was $1.7 billion, down 1% in dollars and down approximately 7% in units. During the quarter, it repurchased about 2.7 million shares at an average price of $120.
Third-quarter revenue is expected to decline 10% to 11% to a range of $2.29 billion to $2.32 billion. Third-quarter diluted EPS is projected at $0.93 to $0.98, versus $2.59 a year earlier. Full-year 2026 revenue is now expected to be $10.35 billion to $10.5 billion, down 5% to 7% from 2025. Full-year diluted EPS is forecast at $9.48 to $9.73, compared with $13.26 in 2025. The company now expects to open approximately 35 net new company-operated stores this year, down from its previous target of about 40. It plans roughly 10 openings in North America, including seven in Mexico, and about 25 in international markets. Frank said incoming CEO Heidi O’Neill, who joins next week, will review the business, strategy and current action plan.
About lululemon athletica (NASDAQ:LULU)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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Lululemon reported its worst comparable sales result since the Great Recession. Nike veteran Heidi O'Neill is set to take over as CEO next week, but investors have been skeptical of her.
Live 5 updates · Last at 4:54pm ET Updates appear automatically.
By Thomas Richmond · Updated Sep 3, 4:54pm ET · Published Sep 3, 3:17pm ET
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That wraps up our initial coverage of Lululemon’s Q2 results. Thank you for stopping by!
Lululemon just reported earnings, with shares initially down 15% following the report. Here are the key numbers:
Revenue: $2.416B vs. $2.46B expected Adjusted EPS: $2.92 vs. $1.80 expected Quick Read:
Lululemon delivered a massive EPS beat, but revenue missed expectations as sales fell 4% year over year.
The 15% sell-off despite the earnings beat suggests investors are far more concerned about weakening sales and the company’s turnaround trajectory than near-term profitability.
Consensus sits at , but the full-year framework matters more. Management already reset the full-year 2026 outlook to , down from .
Lululemon Athletica (NASDAQ:LULU) has historically guided conservatively, excluding tariff impacts from headline numbers.
Bullish vs Bearish Scenarios Bullish guidance would hold North America to the high-single-digit annual decline, sustain approximately 20% China growth, and flag tariff mitigation. Investors also want stability on the operating margin compression.
A bearish outcome would be another EPS cut below , deeper Americas comp erosion, or wider markdowns.
With shares already down , guidance dictates whether incoming CEO Heidi O’Neill inherits a stock ready to rebound or a falling knife.
Bull Case: Why a Beat Could Reset the Narrative China and international momentum: Q1 FY2026 China mainland revenue rose , with full-year China guidance intact at growth. Low expectations: Consensus EPS sits at just after downward revisions in 30 days, and shares trade at a P/E. Crowd conviction: Polymarket puts beat odds at , and insiders are net . Bear Case: Why Confidence May Stay Broken North America still deteriorating: Q2 guidance calls for U.S. revenue to decline in the . Margin collapse: Q2 gross margin is guided down ; operating margin drops to . Post-beat selling pattern: Beats averaged a earnings-day reaction. YTD damage: Shares are down YTD, leaving little room for a guidance cut before Heidi O’Neill arrives.
Lululemon is expected to report earnings at 4:05 PM ET, and the biggest question is whether its struggling North American business is stabilizing.
Management previously guided to low-double-digit declines in North American full-price sales, while tariffs and markdowns are expected to pressure gross margin by roughly 410 basis points this quarter.
The report also comes during a major leadership transition. Interim co-CEOs are preparing to hand control to incoming CEO Heidi O’Neill this month, putting even more attention on management’s outlook and commentary.
Lululemon now trades around 10 times earnings, reflecting how far investor confidence has fallen. An earnings beat paired with signs of stabilization in North America could begin resetting the narrative. Another guidance cut would deepen the company’s credibility problem heading into its new CEO era.
This article is updated throughout the trading day. Check back for more.
Full CoverageThe story so far
Lululemon (NASDAQ:LULU | LULU Price Prediction) is expected to report fiscal Q2 results after the bell today at 4:05 PM ET. Shares are down about 40% year to date, leading Michael Burry to call the stock “screaming cheap.”
Sentiment Meets Margin Reset Last quarter, the athletic-apparel maker posted revenue of $2.5 billion with comparable sales down 2% and diluted EPS of $1.69 versus $2.60 a year earlier. Gross margin contracted to 54.2% from 58.3%, and operating margin dropped to 11.2% from 18.5%, pressured by tariffs and fixed-cost deleverage.
Management cited “spikes of negative commentary in the media and on social channels” and product launches that underdelivered. Traffic softened over the last 6-7 weeks of the quarter. Shares fell 8.56% on the reaction, extending a rout that has pulled the stock 40.03% lower over one year.
Consensus Estimates Metric Q2’26 Estimate YoY Change FY26 Estimate FY27 Estimate Revenue $2.46B -2.6% $11.04B $11.34B EPS (Normalized) $1.7902 -42.3% $11.03 $11.46 The consensus sits inside management’s own Q2 range of $1.76 to $1.81, so the bar is set at the guide. Analyst EPS estimates for the full year have been cut from $12.30 ninety days ago to $11.03. That reset reframes any beat as damage control rather than momentum.
What I’m Watching Tonight Tonight, I’ll be watching how management frames the North America trajectory. Management guided the region to a low double-digit revenue decline in Q2 and expects markdowns to peak this quarter before improving sequentially.
Investors are also going to focus on the company’s gross margin. Tariffs alone carry a 150 basis point gross negative impact this quarter, with 100 basis points of offsets. The company is modeling a 20% back-half incremental tariff rate, and any shift there flows straight to the FY EPS range.
Mainland China is another pillar. Management guided to mid-to-high teens growth in Q2 and roughly 20% for the year, with activations including the Great Wall Yoga Experience. Sustainability of this trend after April’s brand disruption will define the international thesis.
I’ll also watch inventory. Q1 dollar inventory grew 2% while units fell roughly 4%. Cleaner units support the promised markdown moderation. Finally, analysts will listen for the tone on the new CEO Heidi O’Neill appointment and any early strategic direction.
Earnings History Quarter EPS Surprise 1-Day Move 7-Day Move 30-Day Move Q1 27 n/a -8.56% +3.97% +2.00% Q4 26 +4.8% -0.40% +1.05% +5.03% Q3 26 +17.27% +9.60% +2.19% +0.02% Q2 26 +8.74% -18.58% -4.73% +3.20% On average, shares moved -2.9% seven days after earnings across the past six reports.
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Thomas Richmond
Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
VANCOUVER, British Columbia--(BUSINESS WIRE)--lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the second quarter of fiscal 2026, which ended on August 2, 2026. Meghan Frank, Interim Co-CEO and Chief Financial Officer, stated: "While we continue to navigate some challenging dynamics, we are taking a prudent approach with our revised full-year outlook. Our teams remain focused on accelerating growth by strengthening our product offerings, increasing our marketing inve.
