Lululemon is down about 18% to roughly $100.10 in Friday trade, per Reuters, after sliding as much as 20% to $97.85 (24/7 Wall St). Thursday's close was $121.77, so this is a stock now down roughly 41% year-to-date — and the damage is not the quarter, it's the forecast.

The quarter was soft. The guidance was the knife.

Q2 revenue came in at $2.42 billion, down 4% year-on-year, short of the roughly $2.46 billion the street wanted. Global comparable sales fell about 9%, North America comps fell 12%, and the thing Lululemon is actually famous for — core women's leggings — saw sales drop around 20%. Americas revenue fell 8%, against a 1% increase a year earlier.

Then the outlook. Full-year revenue guidance was cut to $10.35–10.50 billion, a 5–7% decline, from a previous flat-to-down-1%. Adjusted EPS guidance went to $9.48–9.73 from $10.95–11.15 — roughly $1.40 of earnings deleted at the midpoint, and the second cut to the full-year view. The Q3 guide implies a 10–11% revenue decline.

Don't be fooled by the headline EPS beat: reported diluted EPS of $2.92 blew past the ~$1.80 consensus, but $0.86 of that was an IEEPA tariff refund benefit, so underlying EPS was closer to $2.06. Gross margin was 60.5%. The beat was a tariff cheque, not demand.

Where it ripples

A 20% drop in leggings sales doesn't mean people stopped buying leggings — it means somebody else sold them. The market is pricing exactly that: Lululemon now trades at about 11.5x forward earnings versus Nike at 20.76x and Adidas at 13.41x (Reuters). Same category, three very different multiples — that gap is the market calling this share loss rather than a soft athleisure market. At least 12 brokerages cut price targets, with Piper Sandler's street-low at $80, and Morgan Stanley warned sales could deteriorate further in the second half.

The other side of the trade: Michael Burry called shares below $100 a "fat pitch" and said he plans to buy more, pointing to $1.3 billion of cash as downside cover.

The date to watch

September 8 — four days away. Ex-Nike executive Heidi O'Neill takes over as CEO. New CEOs rebase expectations; if her first act is a kitchen-sink reset of the second half, that $9.48 low end isn't the floor. If instead she reaffirms the Q3 down-10-to-11% guide, today's $100 handle is the market's worst case already on the tape.

As of 4 Sep 2026, ~10:30 AM ET / 8:00 PM IST. Sources: Reuters via Investing.com, Investing.com, 24/7 Wall St. For discussion and education only — not investment advice. Verify before acting.