- Company name
- lululemon
- Sector
- Athletic apparel
- About
- lululemon designs and sells athletic clothing, shoes and accessories for yoga, running, training and other activities. It sells mostly through its own stores, 825 at the end of Q2 2026, and through its own websites and apps, so it keeps the full retail margin. The Americas give most of the revenue, and China Mainland and other international markets grow faster. lululemon does not own factories: a small number of outside suppliers, mostly in Asia, make its products. Its gross margin is high because it sells most products at full price, and it uses its cash to open stores and to buy back shares. It has no debt.
- Thesis
- The market prices lululemon for a brand that lost its pull with shoppers in its largest market. In Q2 2026, Americas comparable sales fell 12%, total revenue fell 4%, and lululemon now expects 2026 revenue to fall 5% to 7%. Tariffs and the end of the US de minimis exemption raise costs, and without $134.5 million of tariff refunds, gross margin would have fallen in Q2 2026. The company also changed its leaders: the former CEO left on January 31, 2026, the founder Chip Wilson ran a proxy fight that ended in a cooperation agreement in May 2026, and Heidi O'Neill became CEO on September 8, 2026. Investors fear that the brand cannot return to growth and that margins stay lower. For the gap to close, Americas comparable sales must stop falling during 2027, gross margin without tariff refunds must stabilize, and the new product leaders must bring a stronger product line. International sales must also keep growing. lululemon must meet its Q3 2026 guidance of $2.290 billion to $2.320 billion of revenue and diluted EPS of $0.93 to $0.98. The Q3 report in about early December 2026, the Q4 report with the 2027 outlook in about late March 2027, and the first product lines of the new team give the evidence. A brand turnaround takes time, so the gap can close only over several years, if at all.
- Risks
- Americas comparable sales fell 12% in Q2 2026. If the product line does not win back shoppers, sales and margins in the largest market can keep falling.
US tariffs and the end of the de minimis exemption raise product and shipping costs. The Q2 2026 tariff refunds of $134.5 million were one-time, and a consumer class action about tariff-related prices is pending.
Many leaders changed in 2026, including the CEO, the product, operations, brand and technology heads. A new team can take time to deliver results.
Competition in athletic apparel is strong, and new brands compete for the same shoppers. lululemon may need more discounts or marketing to keep sales.
A small number of suppliers in Asia make most products, and China Mainland is a growth market. Trade conflict or supply problems in Asia can hurt sales and costs.
- Balance sheet
- Cash: $1.4B
Debt: $0.0M
Net cash: $1.4B
Undrawn credit line: $594M, to October 2030
lululemon has no debt. On August 2, 2026, it had $1,389.7 million of cash and cash equivalents and no borrowings under its $600 million committed revolving credit facility, which matures on October 15, 2030; $6.3 million of letters of credit used part of it. It also has an uncommitted Chinese yuan credit facility with no borrowings. Its main obligations are store leases, which are not debt here. Cash fell from $1,807.2 million at the start of fiscal 2026 because lululemon bought back $688.3 million of shares in the first half of the year. Operating cash flow was $589.3 million in the first half of 2026.
As of 2026-08-02.
- Checkpoints
- Dec 3, 2026 (estimate): Q3 fiscal 2026 results: Americas sales. Pending. Watch: Revenue and EPS within the $2.290 billion to $2.320 billion and $0.93 to $0.98 guidance and a smaller fall in Americas comparable sales pass; a miss or another outlook cut fails.
Mar 2027 (estimate): Q4 fiscal 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook with stable Americas sales and gross margin pass; an outlook for another year of falling sales fails.
- Recent events
- 2026-10-07: lululemon announced a new leadership structure. Maggie Gauger, former CEO of Athleta, becomes President and Chief Product Officer, and Joseph Godsey, from Walmart Canada, becomes Chief Operating Officer, both from October 26, 2026. The Chief Brand and Product Activation Officer and the Chief Supply Chain Officer will leave on November 6, 2026.
2026-09-08: Heidi O'Neill started as CEO and joined the Board, and Meghan Frank and André Maestrini stopped serving as interim co-CEOs. lululemon had signed her employment agreement on April 21, 2026.
2026-09-03: lululemon reported Q2 fiscal 2026 results. Revenue fell 4% to $2.4 billion, comparable sales fell 9%, and Americas comparable sales fell 12%. Diluted EPS was $2.92, including $0.86 from tariff refunds. lululemon cut its 2026 outlook to revenue of $10.350 billion to $10.500 billion, a fall of 5% to 7%, and diluted EPS of $9.48 to $9.73. It bought back $330.0 million of shares.
2026-08-13: Ranju Das left his role as Chief AI and Technology Officer.
2026-06-04: lululemon reported Q1 fiscal 2026 results. Revenue rose 4% to $2.5 billion, but Americas comparable sales fell 5%. Gross margin fell 410 basis points to 54.2%, and diluted EPS fell to $1.69 from $2.60. lululemon lowered its full-year outlook.
2026-05-26: lululemon signed a cooperation agreement with its founder Chip Wilson after a proxy fight. It added two independent directors, Laura Gentile and Marc Maurer, agreed to add a director with apparel product and brand expertise by October 1, 2026, and supported a proposal to declassify the Board.