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Lululemon Athletica (LULU) AI Stock Analysis

1 Followers
MX:LULU

Lululemon Athletica

(BMV:LULU)

Rating:―N/A
Action:N/A
Date:―

No summary available

Positive Factors
Strong ProfitabilityLululemon continues to earn strong gross and net margins for a retailer, supporting reinvestment in products, stores, technology, and brand building. Although margins have declined from prior periods, the remaining profitability provides a meaningful operating base while management works through current growth challenges.
Negative Factors
Broad Revenue and Traffic PressureDeclining revenue, comparable sales, and traffic across major regions indicate a broad demand and brand-engagement problem rather than an isolated product issue. Persistent weakness could reduce operating leverage, limit store productivity, and make revenue recovery dependent on successful product and marketing actions.

Lululemon Athletica (LULU) vs. SPDR S&P 500 ETF (SPY)

-60%-40%-20%0%20%40%MX:LULU-36.17%SPY+14.28%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
Market Cap
MXN 12.45B
Dividend Yield
―
Average Volume (3M)
2,692
Price to Earnings (P/E)
8.8
Beta (1Y)
0.56
Revenue Growth
-8.26%
EPS Growth
-24.86%
Country
Mexico
Employees
39,000
Sector
Consumer Cyclical
Sector Strength
61
Industry
Apparel - Retail

Lululemon Athletica Business Overview & Revenue Model

Company Description

Lululemon Athletica Inc., alongside its subsidiaries, specializes in the design, global distribution, and retail of athletic apparel and accessories for both women and men. Its business operations are structured into two main divisions: company-owned...

Lululemon Athletica Earnings Call Summary

Earnings Call Date:Sep 03, 2026(Q2-2026)|% Change Since:-1.81%|Next Earnings Date:Dec 03, 2026
Earnings Call SentimentNegative

The call was dominated by significant operating challenges, including declining Q2 revenue and comparable sales, brand and traffic pressure, inconsistent product performance, weakness in leggings and accessories, and sharply reduced Q3 and full-year earnings guidance. Management highlighted strong liquidity, successful community engagement, selected product and regional strengths, cost actions and continued investment in the brand, but these positives did not outweigh the breadth and magnitude of the reported declines.

Positive Updates

Brand and Product Action Plan Underway
Management continues executing its three-pillar action plan focused on product creation, product activation and enterprise enablement, with priorities including updates to core franchises, new styles, overall SKU reductions, tighter inventory management and a return to full-price sales growth.

Negative Updates

Q2 Revenue and Comparable Sales Decline
Total Q2 net revenue decreased 4%, or 5% in constant currency, to $2.4 billion, while comparable sales decreased 10%. Revenue came in below expectations, driven predominantly by China Mainland and weaker-than-planned product launches.

Company Guidance

For Q3, lululemon expects revenue in the range of $2.29 billion to $2.32 billion, representing a decline of 10% to 11%, with approximately 17 net new company-operated stores, 15 optimizations, North America to decline in the mid-teens, the U.S. also in that range, Canada lower, and China Mainland and Rest of World to increase 3% to 5%; gross margin is expected to decrease approximately 250 basis points, markdowns to increase approximately 60 basis points, SG&A rate to deleverage by 800 basis points, operating margin to be approximately 6.5%, EPS to be in the range of $0.93 to $0.98, effective tax rate approximately 30%, and inventory dollar growth in the low single-digit range with units down slightly. For fiscal year 2026, the company expects revenue in the range of $10.35 billion to $10.5 billion, down 5% to 7% relative to 2025, North America down in the low double digits, the U.S. also in that range, Canada slightly lower, China Mainland up in the high single digits, and Rest of World up in the mid-single digits; approximately 35 net new company-operated stores, approximately 35 optimizations, square footage growth of approximately 10%, gross margin down approximately 80 basis points, markdowns up 40 basis points, tariffs at a rate of 10% to 12.5% through September and 20% for the remainder of the year, SG&A up approximately 450 basis points, operating margin down approximately 530 basis points, effective tax rate approximately 30%, diluted EPS in the range of $9.48 to $9.73, inventory dollar growth up in the mid-single-digit range with units approximately flat, repurchase levels in 2026 in line with 2025, and capital expenditures approximately $680 million to $700 million.

Lululemon Athletica Risk Analysis

Lululemon Athletica disclosed 37 risk factors in its most recent earnings report. Lululemon Athletica reported the most risks in the "Production" category.

Higher RiskSector Avg.Lower RiskFinance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Production - Risks related to the company’s ability to manufacture goods and services

Latest Risks Added

0 New Risks

Lululemon Athletica Peers Comparison

Overall Rating

UnderperformOutperform
Sector (61)

Financial Indicators

MX:LULU against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
AEOAEO79Outperform$3.60B10.7820.04%2.32%8.21%89.24%
ANFANF79Outperform$6.53B12.8039.59%―4.73%8.69%
VSXYVSXY79Outperform$8.83B24.8645.94%―10.35%146.52%
URBNURBN78Outperform$7.45B13.2320.72%―11.01%24.97%
GAPGAP69Neutral$7.72B6.2933.13%3.20%1.05%44.82%
Sector *61Neutral$18.38B12.79-2.54%3.03%1.52%-15.83%

* Consumer Cyclical Sector Average

Performance Comparison

0%100%200%MX:LULUANFAEOGAPURBNVSXYDec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
MX:LULU and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
MX:LULULululemon Athletica2003.88-1101.12-35.46%
ANFAbercrombie & Fitch Company151.9280.30112.12%
AEOAmerican Eagle Outfitters21.554.4626.08%
GAPGap, Inc.21.53-2.05-8.68%
URBNUrban Outfitters86.0022.8036.08%
VSXYVictoria's Secret & Company109.8674.91214.33%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.