Shares of Lululemon slid 4.2% to $152.12 on March 26, extending a punishing selloff that has erased roughly half the stock's value over the past year. The stock is now trading near its 52-week low of $156.64, down 51.3% over the past twelve months , as investors digest a forward outlook that signals the premium athleisure brand's growth engine has downshifted dramatically.
• The Guidance Gap Tells the Real Story
Full-year 2026 revenue growth is forecast at just 2% to 4%, and FY2026 diluted EPS guidance of $12.10 to $12.30 implies a decline from the $13.26 earned in FY2025.
The company's own long-range plan had targeted $12.5 billion in FY2026 revenue; actual guidance of $11.35–$11.50 billion is a meaningful miss. For shareholders, this isn't a speed bump — it's an admission that the old growth targets are dead.
• Tariffs and Discounting Are Eating the Margins
Gross profit fell to $2.0 billion, or 54.9% of revenue, versus 60.4% a year ago — a 550-basis-point collapse driven primarily by tariff impacts and higher markdowns. In plain English, Lululemon is paying more to import its goods and also cutting prices to move them. The gross tariff hit is projected at $380 million in FY2026, up from $275 million last year , with only partial offsets expected. Management says it will pull back discounting over time, but expects the move will weigh on sales in the near term.
• North America, the Core Market, Keeps Shrinking
Same-store sales in the Americas haven't grown in roughly two years, and the company expects Americas revenue to decline another 1% to 3% in 2026. International growth — led by a 28% increase in China Mainland — is strong but still a fraction of total sales. China accounts for roughly 40% of Lululemon's growth , making the business increasingly dependent on a single, geopolitically sensitive market.
• No Permanent CEO, a Proxy Fight, and Hungry Competitors
Interim co-CEOs Meghan Frank and André Maestrini lead the company following CEO Calvin McDonald's resignation at the end of January 2026. Meanwhile, founder Chip Wilson has nominated three board candidates in a direct challenge to the current chair.
Alo Yoga has captured 14% of the premium direct-to-consumer athleisure market, while Vuori, valued at $5.5 billion and preparing for an IPO, dominates men's athleisure. Lululemon is fighting a two-front war — internal and external — without a permanent commander.
At roughly 12× forward earnings, the stock looks cheap by historical standards. But cheap for good reason: until margins stabilize and North America stops bleeding, there is no clear catalyst to reverse the slide.