UBS reduced its price target for Lululemon Athletica to $120 from $124 while maintaining a Neutral rating, citing concerns over weak sales growth in China and the United States.
The stock was trading at $118.50, down approximately 33% over the past six months, and carries a price-to-earnings ratio of 9.88. UBS expects the company to trim its fiscal 2026 earnings per share guidance by about $1.25, bringing the range to $9.70 to $9.90, compared with the current Street estimate of $10.93.
Needham maintained its Hold rating but adjusted its fiscal 2026 and 2027 EPS forecasts to $10.98 and $11.08, respectively, aligning with the lower end of the company’s guidance. Options pricing suggests a potential share move of plus or minus 9.9% around the second-quarter earnings release, above the historical average of 9.5%.
The outlook follows recent management departures, including Chief Communications Officer Bill Chandler and Chief AI & Technology Officer Ranju Das, ahead of the scheduled arrival of incoming CEO Heidi O’Neill one week after the second-quarter report. UBS noted that material changes to the U.S. action plan are unlikely before her tenure begins.
Other firms have also adjusted their outlooks. Wells Fargo revised down its fiscal 2027 and 2028 projections, citing performance challenges in North America and China, while Morgan Stanley maintained an underweight rating based on internal survey data reflecting shifting consumer trends in apparel and footwear.
