• In early September 2026, lululemon athletica inc. reported second-quarter results showing year-over-year declines in sales to US$2,415.63 million and net income to US$329.22 million, alongside lower earnings per share.

• The company also cut its full-year 2026 outlook, now projecting a 5% to 7% revenue decline to about US$10.35–US$10.50 billion, even as gross margin benefited from one-off tariff refunds.

• We'll now examine how this weaker guidance and expected 10% to 11% third-quarter revenue decline affects lululemon's longer-term investment narrative.

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lululemon athletica Investment Narrative Recap

To stay invested in lululemon today, you need to believe the brand can reignite demand in its core North American business while leveraging international and digital strengths to offset slower periods. The latest cut to 2026 guidance and the expected 10% to 11% third quarter revenue decline sharpen the focus on a single near term catalyst: whether the product reset can stabilize U.S. trends. At the same time, it amplifies the key risk that U.S. weakness and tariff pressures become more structural than temporary.

In that context, the revised 2026 outlook to US$10.35–US$10.50 billion in revenue, despite a one off boost from tariff refunds, is particularly relevant. It directly tests earlier expectations that cost mitigation and product innovation could cushion the impact of higher tariffs and slowing U.S. sales. If the guidance reset proves conservative and the product refresh gains traction, it could still support the longer term case built around international growth and digital engagement.

Yet even if the brand remains strong globally, investors should be aware that U.S. softness and tariff related margin pressure could...

Read the full narrative on lululemon athletica (it's free!)

lululemon athletica's narrative projects $12.2 billion revenue and $1.6 billion earnings by 2029.

Uncover how lululemon athletica's forecasts yield a $127.73 fair value , a 27% upside to its current price.

Exploring Other Perspectives

Before this earnings reset, the most pessimistic analysts were already assuming flat revenues around US$10.9 billion and lower margins by 2029, so if you share their concern about brand fatigue and rising costs, this latest guidance cut may reinforce that more cautious view and prompt you to compare it with more optimistic scenarios.

Explore 26 other fair value estimates on lululemon athletica - why the stock might be worth just $107.30!