Key Stats for Lululemon Athletica Stock
- Pre-market price change for Lululemon Athletica stock: -11%
- $LULU Share Price as of Jun. 4: $125
- 52-Week High: $276
- $LULU Stock Price Target: $172
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What Happened?
Lululemon Athletica (LULU) stock sank about 11% in late trading after the company cut its full-year sales and profit guidance, even though first-quarter results themselves beat low expectations.
Current quarter results met the expectations almost exactly.
- Earnings Per Share stood at $1.69 against the $1.68 expectation
- Revenue stood at $2.47 billion against the $2.43 billion expectation
Lululemon now expects fiscal 2026 sales of $11 billion to $11.15 billion, down from a previous range of $11.35 billion to $11.50 billion.
It forecast EPS between $10.95 to $11.15, down from $12.10 to $12.30. Q2 guidance was also weak, with revenue guided to $2.45 billion to $2.48 billion versus expectations of $2.60 billion.
Interim CEO Meghan Frank blamed two things. Frank pointed to “negative commentary in the media” and recent product launches that failed to wow shoppers.
She also flagged the proxy fight with founder Chip Wilson, who has been publicly critical of the brand, and raised questions about the composition of some products.
The pressure is heaviest at home.
- Comparable sales in the Americas fell 5% in the quarter, the fifth straight quarterly decline, and
- Management expects North American sales to fall by a low double-digit percentage in Q2.
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What the Market Is Telling Us About Lululemon Athletica Stock
This is a wake-up call. Lululemon Athletica stock has plunged about 40% this year before today’s drop, and the post-earnings move pushed it deeper.
Tariffs are also taking a big bite, while gross margins contracted 410 basis points to 54.2%.
However:
- China revenue grew 30% in Q1, and the company still expects about 20% growth there for the year.
- International sales overall rose 22%.
- But North America is by far the biggest region, and the weakness there is what really matters.
Heidi O’Neill, a Nike veteran who most recently led Nike’s Consumer, Product, and Brand business, will take over as CEO in September.
She has a track record of building Nike’s women’s business and shortening product lead times.
Lululemon is already working to cut its product development cycle from 18 to 24 months down to 12 to 14 months.
For now, Lululemon Athletica stock looks risky. Sales are sliding in its largest market. Margins are getting squeezed by tariffs. And the real strategy changes won’t kick in until the new CEO arrives.
For long-term investors, Lululemon Athletica stock could become interesting once O’Neill takes over and the turnaround plan gets clearer.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
