Lululemon Athletica is scheduled to release its second-quarter fiscal 2026 earnings after U.S. markets close on Thursday, with analysts projecting earnings per share of $1.82 on revenue of $2.46 billion.
The company’s profit is expected to increase from the prior quarter’s $1.69 per share, though revenue is forecast to decline from $2.50 billion. The outlook reflects persistent pressure in key markets, including China, where competition and consumer sentiment have weakened. New CEO Heidi O'Neill will officially assume leadership on September 8, succeeding the outgoing executive team amid a challenging operating environment.
Analysts’ price targets suggest limited upside, with a mean target of $127.35 implying roughly 6% potential appreciation from the current share price near $120. The stock’s forward price-to-earnings ratio stands at 10.7, the lowest in years, underscoring investor caution. Over the past 60 days, EPS estimates have edged down 0.23% and revenue estimates have slipped 0.12%, though both have remained stable in the past week.
Competitive pressures are intensifying, particularly in China, where privately held rivals Alo Yoga and Vuori are expanding. Alo launched an official Tmall store this month, further challenging Lululemon’s position in the market. Analysts at Piper Sandler warned that the China region may underperform following a recent online backlash tied to a Great Wall yoga activation and increased competition on Tmall.
In the first quarter, Lululemon met EPS expectations of $1.69 and exceeded revenue forecasts by 2.5%, reporting $2.50 billion in sales. However, the company had guided for a "low-double-digit decline in second-quarter U.S. comps," a trend that KeyBanc’s proprietary spending data suggests persisted through the quarter, with elevated promotional activity continuing to weigh on margins.
UBS anticipates management will reduce fiscal 2026 EPS guidance by approximately $1.25, citing weak sales-growth outlooks in both China and the U.S. The earnings report will provide clarity on Lululemon’s ability to navigate these headwinds and steer the company toward sustainable growth under new leadership.
