Lululemon Athletica Inc. (NASDAQ:LULU) stock plunged on Friday, down by 8%, after the athletic apparel retailer reported mixed first-quarter results, issued second-quarter guidance well below Wall Street expectations, and lowered its full-year outlook on Thursday.
Earnings Snapshot
Lululemon reported first-quarter revenue of $2.47 billion, up 4% from a year earlier and ahead of analysts’ estimates of $2.43 billion. On a constant-currency basis, revenue increased 2%.
Adjusted earnings came in at $1.69 per share, narrowly missing consensus estimates of $1.70 per share.
For the second quarter, Lululemon expects revenue of $2.45 billion to $2.48 billion, below analyst estimates of $2.60 billion. The company forecasts earnings of $1.76 to $1.81 per share, compared with consensus estimates of $2.71 per share.
Lululemon lowered its fiscal 2026 revenue outlook to a range of $11 billion to $11.15 billion from prior guidance of $11.35 billion to $11.5 billion. The revised forecast compares with analyst expectations of $11.46 billion.
The company also cut its full-year earnings outlook to $10.95 to $11.15 per share from prior guidance of $12.10 to $12.30 per share. Analysts were expecting earnings of $12.31 per share.
Analyst Opinions
BTIG analyst Janine Stichter downgraded the company from Buy to Neutral.
The analyst says that although the result was broadly in line, the late-quarter slowdown points to more execution risk ahead, with the second quarter expected to be the first post-COVID sales decline.
Despite ongoing efforts across product, marketing, and merchandising, Stichter writes that trends could weaken further before stabilizing.
Management cited multiple contributing factors, but the analyst sees the core issues as still not fully resolved, leaving the company in a transitional phase ahead of incoming CEO Heidi O’Neill in September.
In addition, guidance assumes limited North America improvement, while comparisons get tougher as promotional support normalizes, potentially pressuring demand, adds the analyst.
Stichter slashed the second quarter EPS estimate to $1.81 from $2.58 prior and now sees FY26 EPS of $10.99 versus $12.29 earlier.
Meanwhile, Needham analyst Tom Nikic reiterated a Hold rating on the stock.
The analyst says they remain sidelined on Lululemon following a difficult quarter and a significant reduction in FY outlook.
Given a weak macro backdrop, intensifying competition, and a new CEO not joining for another two months (with potential for further resets), the analyst sees limited visibility to call a bottom confidently.
LULU Price Action: Lululemon Athletica shares were down 8.22% at $114.65 at the time of publication on Friday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
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