lululemon athletica (NASDAQ:LULU) Issues Quarterly Earnings Results, Beats Estimates By $1.13 EPS

lululemon athletica (NASDAQ:LULU) posted its quarterly earnings results on Thursday. The apparel retailer reported $2.92 EPS for the quarter, topping the consensus estimate of $1.79 by $1.13, FiscalAI reports. The company had revenue of $2.42 billion for the quarter, compared to the consensus estimate of $2.46 billion. lululemon athletica had a net margin of 12.78% and a return on equity of 27.73%. The firm’s revenue was down 4.3% compared to the same quarter last year. During the same quarter last year, the firm posted $3.10 EPS. lululemon athletica updated its FY 2026 guidance to 9.480-9.730 EPS and its Q3 2026 guidance to 0.930-0.980 EPS.

Here are the key takeaways from lululemon athletica’s conference call:

• Q2 revenue fell 4% to $2.4 billion, with comparable sales down 10%; North America declined 8% and China mainland grew just 4% reported, or declined 2% in constant currency.
• Management lowered full-year 2026 guidance to revenue of $10.35 billion–$10.5 billion, down 5%–7%, and diluted EPS of $9.48–$9.73 versus $13.26 in 2025. Q3 is expected to be particularly weak, with revenue down 10%–11% and operating margin falling to approximately 6.5%.
• Product demand remains inconsistent, including a roughly 20% decline in leggings sales and a 13% drop in accessories, while traffic and conversion are under pressure in both stores and digital channels. Management expects additional seasonal clearance, with markdowns rising 40 basis points for the full year.
• The company is responding by chasing stronger-performing products such as Groove, Define, Scuba, and newer away-from-body bottoms, increasing chase volume approximately 20%, investing more in brand marketing and community activations, and tightening expenses and store expansion plans.
• Lululemon ended Q2 with $1.4 billion in cash, repurchased approximately 2.7 million shares, and retained $713 million under its buyback authorization. Gross margin also benefited from a $134.5 million tariff refund, contributing $0.86 to quarterly EPS, although management is assuming no further refunds in its guidance.

lululemon athletica Stock Down 17.4%

Shares of NASDAQ:LULU opened at $100.61 on Friday. The company has a market capitalization of $11.94 billion, a price-to-earnings ratio of 8.24, a price-to-earnings-growth ratio of 2.53 and a beta of 0.87. lululemon athletica has a 52 week low of $97.99 and a 52 week high of $225.98. The firm has a 50 day moving average of $118.42 and a 200 day moving average of $136.36.

Wall Street Analysts Forecast Growth

LULU has been the subject of several research analyst reports. Barclays decreased their price target on shares of lululemon athletica from $113.00 to $95.00 and set an “equal weight” rating for the company in a research note on Friday. UBS Group decreased their target price on lululemon athletica from $120.00 to $106.00 and set a “neutral” rating for the company in a research report on Friday. Piper Sandler lowered their target price on lululemon athletica from $110.00 to $80.00 and set a “neutral” rating for the company in a report on Friday. BNP Paribas Exane dropped their price target on lululemon athletica from $88.00 to $44.00 and set an “underperform” rating on the stock in a research report on Friday. Finally, Wells Fargo & Company cut their price target on lululemon athletica from $105.00 to $95.00 and set an “equal weight” rating on the stock in a research note on Friday. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have assigned a Hold rating and five have given a Sell rating to the stock. According to MarketBeat, lululemon athletica currently has an average rating of “Reduce” and an average price target of $116.46.

Key Stories Impacting lululemon athletica

Here are the key news stories impacting lululemon athletica this week:

• Positive Sentiment: Fiscal Q2 adjusted EPS of $2.92 exceeded the $1.79 consensus estimate. However, approximately $0.86 per share of the result came from tariff refunds, making the beat less indicative of underlying operating strength. lululemon Q2 Earnings Beat on Tariff Refunds Despite Revenue Miss
• Positive Sentiment: Michael Burry reportedly remains bullish and indicated he may buy more shares below $100, offering a contrarian vote of confidence despite the disappointing results. Lululemon Sinks 20% After Second Guidance Cut
• Neutral Sentiment: Incoming CEO Heidi O’Neill takes over next week, putting renewed focus on whether a product refresh, stronger marketing and improved traffic can restore growth. Lululemon forecast cut hits shares, underscores challenge for next CEO
• Neutral Sentiment: Analyst opinion became more cautious: Goldman Sachs, Barclays, JPMorgan, Morgan Stanley, Piper Sandler and others lowered price targets, though several retained neutral or market-perform ratings and some targets remain above the stock’s recent level.
• Negative Sentiment: Q2 revenue fell 4% year over year to $2.42 billion, below the $2.46 billion consensus, while comparable sales dropped 9%. Americas revenue declined 8% and comparable sales fell 12%, signaling weakness in the company’s core market. Lululemon shares tumble on weak China, North America sales
• Negative Sentiment: Management reduced fiscal 2026 revenue guidance to $10.35 billion-$10.50 billion and EPS guidance to $9.48-$9.73. Q3 revenue is expected to decline 10%-11%, reinforcing concerns that the slowdown will persist.
• Negative Sentiment: The CEO transition, uneven product acceptance, softer store traffic, intense competition and a stronger-than-expected jobs report that increased rate concerns compounded the pressure on the apparel retailer’s valuation.

Insiders Place Their Bets

In related news, Director Charles Bergh bought 4,275 shares of the company’s stock in a transaction on Monday, June 15th. The shares were acquired at an average price of $117.05 per share, with a total value of $500,388.75. Following the transaction, the director owned 10,365 shares of the company’s stock, valued at $1,213,223.25. The trade was a 70.20% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. 0.54% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On lululemon athletica

A number of hedge funds have recently made changes to their positions in LULU. Brighton Jones LLC purchased a new position in lululemon athletica in the fourth quarter valued at about $429,000. Voleon Capital Management LP purchased a new stake in shares of lululemon athletica during the second quarter valued at about $201,000. Aster Capital Management DIFC Ltd bought a new stake in shares of lululemon athletica in the 4th quarter valued at about $136,000. Smartleaf Asset Management LLC boosted its holdings in shares of lululemon athletica by 88.7% in the 4th quarter. Smartleaf Asset Management LLC now owns 619 shares of the apparel retailer’s stock valued at $130,000 after buying an additional 291 shares in the last quarter. Finally, Sumitomo Mitsui Financial Group Inc. purchased a new position in shares of lululemon athletica in the 4th quarter worth approximately $128,000. 85.20% of the stock is currently owned by hedge funds and other institutional investors.

lululemon athletica Company Profile

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.