QQWong
11:05

$lululemon athletica(LULU)$  

Lululemon’s 11% drop following its Q1 earnings report reflects deep structural issues in its core market . While the company beat EPS expectations, the outlook was dismal: full-year revenue is now expected to decline 0-1%, a sharp reversal from prior 2-4% growth guidance .

The probability of LULU falling below $100 is **low but not zero** in the near term. Currently trading around $124-$131 , reaching sub-$100 would require a further ~23% decline. Several factors make this unlikely:

Supporting a bottom above $100:

· Analyst price targets remain higher: Wells Fargo set $110, while the consensus target is ~$172

· International growth, particularly 30% revenue surge in Mainland China, provides a partial offset

· New CEO Heidi O’Neill (former Nike executive) takes over in September, creating a potential turnaround catalyst

Bearish risks that could pressure the stock:

· Americas revenue declined 3% with US comparable sales down 4-6%

· Q2 guidance calls for 2-3% revenue decline vs. expectations of growth

· Gross margin contracted 410 basis points, with tariffs weighing heavily

· The stock is down over 60% in 12 months, reflecting deteriorating momentum

Verdict: $100 is possible only if the North American deterioration accelerates dramatically. The more probable scenario is a trading range between $110-$135 as the market waits for the new CEO’s strategy. Investors should monitor Q2 results closely—another guidance cut could test the $110 level, but a full breach of $100 would require a true operational meltdown.

Lululemon Drops 11%, Americas Revenue Falls: See it Under $100?
Lululemon reported FY2026 Q1 revenue of $2.5 billion, up 4% year-over-year, yet tumbled 11% after hours as regional divergence alarmed investors: Americas net revenue declined 3%, with growth entirely propped up by a 22% international surge. EPS came in at $1.69, well below last year's $2.60, reflecting significant margin pressure. With North America cooling and growth engines fully shifted overseas, how long will the domestic slowdown persist — and is this post-earnings plunge a buying opportunity?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment