Key Stats for Lululemon Stock
- Current Price: $116.35
- Target Price (Mid): ~$142
- Street Target: ~$127
- Potential Total Return: ~22%
- Annualized IRR: ~5% / year
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free) >>>
What Happened?
lululemon athletica inc. (LULU) reports second-quarter results on Thursday, September 3, after the close, and the report itself is not the risk. Management guided Q2 back in June, so a soft quarter is already priced in. The risk is the sentence that comes after the quarter: what the company says about the rest of fiscal 2026.
UBS told clients on August 25 that lululemon may use this print to cut its full-year profit outlook again, and few investors expect the incoming CEO to reset the story on a report that lands a week before she starts. Shares near $116 already sit about 48% below their 52-week high, so the market is bracing for bad news it thinks it understands, while quietly asking whether the worst is now in the price.
The Guide Investors Are Grading Against
In June, interim Co-CEO and CFO Meghan Frank laid out a Q2 that would be hard to love. The company guided revenue to $2.45 billion to $2.475 billion, a decline of 2% to 3%, with North America down in the low double digits. It guided EPS to $1.76 to $1.81, against $3.10 a year earlier. TIKR’s consensus data shows the Street near $2.46 billion in revenue and about $1.80 in EPS, so Wall Street has largely marked its estimates down to management’s own numbers.
Frank guided Q2 gross margin to fall about 410 basis points versus last year, driven by tariffs, markdowns, and store investment. She was direct about why clearance is rising: “the slower-than-expected top line trends in Q2 will necessitate additional seasonal clearance.” That line is the quarter’s tell. If markdowns run hotter than the guided 50-basis-point increase, the back-half margin recovery she promised gets harder to believe.
Two things would read as genuinely good on print day. First, revenue at or above the $2.475 billion high end, which would suggest the traffic drop that hit late in Q1 kept easing. Second, evidence that U.S. full-price selling improved, since Frank flagged a “meaningful sequential improvement” there in Q1. A miss on either, paired with a full-year guide-down, is the outcome that bears are positioned for.
See historical and forward estimates for Lululemon stock (It’s free!) >>>
Why the Full-Year Number Carries More Weight Than Q2
In June, lululemon took full-year revenue to $11 billion to $11.15 billion, flat to down 1%, and cut full-year EPS to $10.95 to $11.15, itself a cut from the $12.10 to $12.30 the company guided a quarter earlier. Now UBS argues the company could take EPS guidance down by roughly $1.25 more, to about $9.70 to $9.90, below the roughly $10.93 Street consensus. That is UBS’s estimate of what management might do, not a company statement, and lululemon has beaten Street EPS in each of the last four quarters, so the setup is not one-directional.
Constant-currency China Mainland revenue grew 23% in Q1, and management held its roughly 20% full-year growth target for the region even after a burst of negative social commentary that Frank said “has now subsided.” This report shows whether that 20% guide still holds after a full quarter. The segment now matters: TIKR’s data shows China Mainland revenue reached about $1.75 billion last fiscal year, up from roughly $1.36 billion the year before.
Heidi O’Neill, a former senior Nike executive, becomes CEO in September, one week after this report. Ahead of her arrival, lululemon has seen senior turnover, including the August 13 departure of its Chief AI and Technology Officer after less than a year, disclosed in a regulatory filing. Frank framed the current work as setting up so O’Neill “steps in, hits the ground running.” The recent tape shows how jumpy sentiment is: on August 25, LULU fell in sympathy with a weak quarter and margin miss from DICK’s Sporting Goods, a reminder the whole premium activewear channel trades on the same worry.
LULU trades near 10.6x next-twelve-month P/E and about 6.1x NTM EV/EBITDA, versus Nike near 22.5x forward earnings and Deckers around 11.7x. So lululemon trades at a clear discount to both. That gap is justified only if earnings stop falling. A stock growing EPS is cheap at 10x; a stock cutting guidance every quarter is not, and that is exactly what September 3 tests.
See how Lululemon performs against its peers in TIKR (It’s free!) >>>
TIKR Advanced Model Analysis
- Current Price: $116.35
- Target Price (Mid): ~$142
- Potential Total Return: ~22%
- Annualized IRR: ~5% / year
See analysts’ growth forecasts and price targets for Lululemon stock (It’s free!) >>>
Using TIKR’s mid-case assumptions, the model reaches a target near $142, roughly 22% total upside realized by January 2031, or about 5% a year over the next four-plus years. The mid case runs on a revenue CAGR of about 3%, carried by two drivers: continued roughly 20% growth in China Mainland and low-double-digit square footage growth from international store openings, most outside North America. The margin driver is management’s enterprise efficiency program, which offset about 100 basis points of tariff pressure in Q1 and is meant to build over time. The primary risk is that North America, still the largest region, keeps declining and drags blended margins down faster than international growth can lift them.
The upside case is that product newness and a 20% larger chase order reaccelerate full-price selling that guidance does not currently assume. The downside case is a structurally slower North American consumer plus another guidance cut, which would compress earnings and the multiple at the same time.
Conclusion
Watch the full-year EPS guidance, not the Q2 headline. If management holds the $10.95 to $11.15 range and keeps China near 20%, the recovery thesis survives, and a stock priced for structural decline gets room to re-rate. If it cuts toward the $9.70 to $9.90 that UBS floated, the case for a single-digit multiple weakens fast, because the multiple is only cheap against earnings that hold. The answer comes after the close on September 3, one week before a new CEO inherits whatever this print leaves her.
See what stocks billionaire investors are buying so you can follow the smart money with TIKR.
Should You Invest in Lululemon?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Lululemon, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Lululemon alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Analyze Lululemon on TIKR Free →
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
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!
