Lululemon Beats Q1 Revenue but Cuts Full-Year Guidance, Stock Drops 11%
Lululemon posted Q1 revenue of $2.5B, up 4% YoY and slightly ahead of estimates, but net income slid sharply, Americas comps fell 6%, and the company slashed its full-year revenue and EPS outlook. Shares tumbled roughly 11% after the print.
TL;DR
Lululemon reported Q1 revenue of $2.5B, up 4% YoY and ~$60M ahead of consensus, but net income fell sharply YoY. Americas comps weakened while international held up, and the company cut its full-year revenue and EPS guidance. Shares fell ~11% after the print. China remained a bright spot.
- Q1 revenue $2.5B, +4% YoY, beat estimates by ~$60M; net income $195M, EPS $1.69
- Americas comps (constant currency) -6%; international comps +13%; Mainland China revenue +30% to $478.4M (+23% constant currency), comps +13%
- Gross margin 54.2% vs. 58.3% a year ago; tariffs weighed ~280 bps
- Full-year revenue guidance cut to $11.0B–$11.15B (from $11.35B–$11.5B); EPS guidance cut to $10.95–$11.15 (from $12.10–$12.30)
After the close on June 4, Lululemon (LULU) reported fiscal Q1 2026 results. Revenue edged past Wall Street's expectations, but net income fell sharply YoY, and the company lowered its full-year revenue and EPS guidance. Shares dropped roughly 11% in the aftermath.[CNBC]
Q1 Results
Lululemon posted fiscal Q1 revenue of $2.5B, up 4% YoY and about $60M above consensus. Net income came in at $195M, or $1.69 per diluted share. Operating income was $277M, representing 11.2% of net revenue. Multiple outlets noted the quarter's significant YoY profit decline.[Sporting Goods Intelligence]
The geographic split was stark. Comps in the Americas — the company's largest market — fell 6% on a constant-currency basis, while international comps rose 13%. Mainland China was the standout: revenue grew 30% YoY (23% constant currency) to $478.4M, with comps up 13% on a constant-currency basis.[GuruFocus]
On profitability, gross margin contracted to 54.2% from 58.3% in the year-ago quarter. Management attributed roughly 280 bps of that compression to tariffs, and flagged an additional ~410 bps of tariff-related gross margin headwind in Q2 — though they expect the impact to largely offset over the full year.
Full-Year Guidance Cut
The guidance reduction was the headline takeaway. Lululemon lowered its fiscal 2026 revenue outlook to $11.0B–$11.15B from the prior range of $11.35B–$11.5B, and trimmed its EPS guidance to $10.95–$11.15 from $12.10–$12.30.[Yahoo Finance]
Management pointed to softening Americas demand and weak comps as the primary drivers. Some coverage also cited product assortment missteps and online sentiment issues adding pressure to the Americas business. The company is also navigating a leadership transition: long-tenured CEO Calvin McDonald stepped down in January 2026, and the CFO and President & Chief Commercial Officer André Maestrini are jointly serving as interim co-leaders.[Retail TouchPoints]
Stock Reaction and What to Watch
LULU was among the bigger single-day decliners in US equities after the print, falling roughly 11%. The session was already under pressure from a semiconductor selloff and stronger jobs data pushing rates higher — the guidance cut landed into an already-weak tape.
Key data points to track going forward: Americas comps trajectory, the actual tariff drag on gross margin versus management's offset expectations, and whether full-year guidance faces another revision. Results from other premium discretionary brands reporting in the same window will offer a useful read on category-level demand.
Sources
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