Lululemon Athletica (NASDAQ: LULU) has seen its shares tumble 47.7% over the past 52 weeks, significantly underperforming both the S&P 500 Index and broader market benchmarks.
The athletic apparel maker reported its Q1 2026 results on June 4, delivering a set of figures that rattled investor confidence and raised fresh questions about near-term growth prospects.
Management projected Q2 earnings per share of $1.76 to $1.81, a figure that landed well below what analysts had been forecasting heading into the announcement.
The company also warned that Q2 gross margin would decline approximately 410 basis points, driven by higher tariff costs and ongoing investments across the business.
Lululemon cut its fiscal 2026 revenue outlook to flat to down 1%, a stark reversal from the previous guidance of 2% to 4% growth that had underpinned bullish sentiment earlier in the year.
Full-year EPS guidance was also slashed to $10.95 to $11.15, compared to the prior range of $12.10 to $12.30, representing a meaningful step down in profitability expectations.
Investor anxiety deepened further after the company reported a 4% decline in U.S. revenue during Q1, a troubling development given that the United States remains the company’s largest and most important market.
Management also flagged expectations for additional seasonal clearance activity, citing slower-than-expected sales and a muted consumer response to several new product launches.
Analysts now expect Lululemon to report Q2 EPS below the $3.10 it posted in the same quarter a year ago, although the company has managed to beat Wall Street’s earnings estimates in each of the last four quarters.
For the full fiscal 2026 year, the consensus forecast calls for EPS of $10.94, marking a 17.5% decline from the $13.26 reported in fiscal 2025.
Looking further ahead, EPS is anticipated to recover somewhat, with analysts projecting a 5.5% year-over-year increase to $11.54 in fiscal 2027.
The broader analyst community remains cautious on LULU, with a consensus “Hold” rating across the 32 analysts currently covering the stock.
Of those 32 analysts, one recommends “Strong Buy,” 25 indicate “Hold,” two advise “Moderate Sell,” and four assign a “Strong Sell” rating.
The average analyst price target sits at $122.62, implying a potential upside of approximately 7.3% from current trading levels, offering modest encouragement amid an otherwise challenging outlook.
