Lululemon $LULU falls 8.6%; FY2026 EPS guide cut to $10.95-$11.15

Lululemon Athletica $LULU fell 8.6% on June 5 after the company cut its FY2026 earnings outlook to $10.95-$11.15 per share and guided annual revenue to $11.00B-$11.15B. The move followed the company’s official fiscal Q1 2026 release, which showed headline growth but weaker North American demand and lower margins.

Fiscal Q1 net revenue increased 4% year over year to $2.471B, while diluted EPS fell to $1.69 from $2.60 a year earlier. Comparable sales rose 1% on a reported basis and declined 2% in constant currency. The regional split was the pressure point: Americas net revenue fell 3%, Americas comparable sales fell 5%, and international revenue increased 22%.

Profitability deteriorated faster than revenue. Gross profit declined 3% to $1.339B, gross margin narrowed 410 basis points to 54.2%, and operating income fell 37% to $276.9M. Operating margin was 11.2%, down 730 basis points from 18.5% in the prior-year quarter. Lululemon also repurchased 2.2M shares for $358.3M during the quarter.

The guidance reset made the earnings release a Tier-1 stock-move story. For fiscal Q2, management guided revenue to $2.450B-$2.475B, down 3% to 2%, and diluted EPS to $1.76-$1.81. For FY2026, the company now expects revenue to decline 1% to flat and EPS to land at $10.95-$11.15. A market data summary placed the June 5 stock move at -8.6%, with shares near a multi-year low.

Investors will watch whether the Americas comp-sales decline moderates before the next quarterly report, whether gross margin stabilizes after the 410 bps Q1 compression, and whether the June 25 shareholder meeting changes board-level pressure around product and brand execution.

Not investment advice. Verify all figures with primary sources before acting.