Lululemon Athletica Inc. Q2 2026 Results and Outlook

Lululemon Athletica Inc. reported second‑quarter fiscal 2026 results that surpassed earnings expectations but fell short on revenue, leading to a 15% decline in its NASDAQ‑listed shares.

The company posted adjusted earnings per share (EPS) of $2.92, exceeding the analyst consensus of $1.82 by $1.10. This EPS figure incorporates a one‑time benefit of $0.86 per share from tariff refunds and associated interest; excluding that benefit, adjusted EPS would have been $2.06.

Revenue for the quarter declined 4% year‑over‑year to $2.4 billion, missing the consensus estimate of $2.46 billion. Comparable sales fell 9%, or 10% on a constant‑dollar basis, with the Americas segment down 12% and international sales down 3%.

Guidance for the third quarter of fiscal 2026 was revised to a revenue range of $2.29 billion to $2.32 billion, implying a decline of 10% to 11% versus the prior year. The midpoint of $2.305 billion is well below the analyst consensus of $2.53 billion. Third‑quarter EPS is projected between $0.93 and $0.98, compared with the consensus of $2.41.

For the full fiscal year 2026, Lululemon now expects revenue of $10.35 billion to $10.5 billion, representing a 5% to 7% decline, with a midpoint of $10.425 billion versus the consensus of $11.03 billion. Full‑year EPS guidance was lowered to a range of $9.48 to $9.73, trailing the consensus estimate of $10.84.

"While we continue to navigate some challenging dynamics, we are taking a prudent approach with our revised full‑year outlook," said Meghan Frank, Interim Co‑CEO and Chief Financial Officer. She added that the company remains focused on accelerating growth through stronger product offerings, increased marketing investments, and disciplined expense management.

Gross margin improved by 200 basis points to 60.5%, a rise that includes 560 basis points attributable to the tariff refunds. Conversely, operating margin decreased by 190 basis points to 18.8%.

The combination of weaker-than‑expected revenue guidance and lower full‑year EPS expectations drove the stock to tumble 15% in after‑hours trading.