What Is Lululemon No Longer Telling You? Trefis Team Thu, October 8, 2026 at 2:20 PM EDT 3 min read LULU +1.12% ^GSPC -0.59% NKE +0.55% DECK +2.79% VFC +1.01% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Lululemon Athletica (LULU) stock is priced at 7.3 times earnings, compared to a 21.5 multiple for the S&P 500. A valuation that low suggests buyers doubt those earnings can last. Shareholders need to understand exactly what they are holding as the company changes its priorities. Back in March 2025, management focused heavily on introducing new shoppers to the Lululemon brand. Today, executives are highlighting a very different narrative. So what is it?
Lululemon Now Leads With A Brand Under Pressure
Executives are now leading with the challenges facing their brand. During the fiscal Q2 2026 call on September 3, 2026, management acknowledged that the brand remained under pressure across both of its largest markets. They also noted that negative commentary in the media and on social channels had hurt traffic.
That marks a stark departure from the fiscal Q4 2024 call held in March 2025. At that time, management told investors the opportunity to grow awareness of the brand remained large, describing a brand that many shoppers had yet to discover. Financial results seemed to justify that confidence, with fourth-quarter earnings per share up 16%. Now the narrative has shifted away from reaching people who had never heard of Lululemon. Instead, the company is dealing with consumers who already know the brand but are visiting less.
How Much Have Lululemon's Sales Slowed?
Lululemon is experiencing a deceleration in revenue growth. Measured over twelve months each time, growth slowed from 13.0% two years ago to 1.7% now. A year ago it was 9.2%, meaning the pace has dropped in each of the past two years. In fiscal Q2 2026 alone, revenue fell 4% from a year earlier.
The company reports as a single business, generating $11.1 billion of revenue over the past twelve months. A closer look shows that some of its sales fell faster than the overall total. Comparable sales fell 10% in fiscal Q2 2026. Meanwhile, sales of leggings, which management counts among its core categories, fell about 20% in the quarter.
Is Lululemon's Brand Trouble Reaching Its Profit?
The brand's difficulties are directly hitting the bottom line, turning management's change in tone into a concern for shareholders. During the September 3 call, executives guided to fiscal 2026 earnings per share of $9.48 to $9.73. That compares against the $13.26 reported in fiscal 2025. Ultimately, the low multiple investors pay today is based on earnings that management expects to shrink.
Executives are not banking on a quick repair. The company has plans to improve its product, its brand, and the experience it gives shoppers. However, management noted that its forecast leaves out any gain those plans might bring.
Shareholders can still find two points of reassurance. Management said the company would keep up its marketing spending, and on October 7, 2026, Lululemon named a chief product officer, a newly created role.
Looking ahead, management expects revenue to fall 10% to 11% in fiscal Q3 2026. A decline of less than 10% would indicate that sales held up better than executives anticipated. A fall of 10% or more, coming right after the 4% fall in fiscal Q2 2026, would signal that pressure on the brand is still building.
Does This Mean You Should Act On LULU?
Our purpose is to inform you with unique data so you can make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.
There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.
