Top 5 Analyst Questions for Lululemon Ahead of Tonight’s Q1 Earnings

That wraps up our initial coverage of Lululemon’s Q1 results. Thank you for stopping by!

With the guidance cut already digested, the prepared remarks and Q&A will determine whether Lululemon sinks below 9% or starts to recover.

• 4:30 PM ET – Opening remarks: Listen for whether Maestrini frames the 5% Americas comp decline as cyclical or structural. Any use of “reset” or “transitional year” would confirm the Jefferies 2027 turnaround thesis.
• 4:40 PM ET – CFO Frank on margins: The 410 bps gross margin contraction needs a quantified tariff breakdown versus promotional pressure.
• 4:50 PM ET – Q&A opens: Expect Chip Wilson’s board allies to push on full-price discipline.
• 5:15 PM ET – Buyback signal: Any acceleration against the $430.4 million Q1 pace could stabilize sentiment.

Form 4 filings over the past 90 days show net buying at Lululemon. Dollar-weighted purchases by Director Charles Bergh and interim co-CEO André Maestrini outweighed sales that were clustered in late March.

Top 5 Insider Transactions (Past 90 Days)

What the Pattern Signals

Discretionary cash buys total roughly 9,365 shares against fewer than 2,500 shares disposed, a net positive given LULU’s recent 39.35% YTD drawdown. Bergh’s open-market purchase above $164 and Maestrini’s buy below $152 suggest insiders viewed weakness as opportunity.

Late-March sales by Frank, Maestrini, and Neuburger were small, similarly sized, and clustered on identical dates, consistent with scheduled tax or diversification trims rather than conviction selling.

Cash buys are atypical and modestly bullish compared with historical equity-grant-heavy activity. The signal doesn’t outweigh tariff and margin risk, but it ranks among the more constructive insider tells in months.

Bear Concerns: Validated

• Americas weakness: Confirmed. Americas revenue fell 3% with comparable sales down 5%, worse than the -1% Q4 exit.
• Margin compression: Confirmed. Gross margin landed at 54.2%, contracting 410 bps; operating income dropped 37% YoY.
• EPS decline: Validated and deeper. FY27 EPS guidance of $10.95-$11.15 sits below the prior $12.10-$12.30 range and consensus $12.29.
• Tariffs: Now embedded, driving the cut alongside “macroeconomic headwinds.”

What Each Side Says Now

Bears will argue the 7% drop reflects a structural reset, with Americas still deteriorating and gross margin pressure widening.

Bulls counter that international revenue grew 22%, Q1 beat on revenue and EPS, and shares trade at 10 times earnings with insiders buying.

After-Hours Update: Guidance Cut Drives The Decline

Shares of Lululemon (NASDAQ:LULU) are extending losses in after-hours trading following the 7% initial drop on the Q1 report. The stock closed the regular session at $124.92, already down 39.35% year-to-date, leaving little cushion for a disappointing outlook.

The move is squarely tied to guidance. FY27 EPS of $10.95-$11.15 sits well below the $12.29 consensus and undercuts the prior $12.10-$12.30 range management issued in March. Q2 revenue of $2.45B-$2.48B trails the $2.59B Street view.

Americas comps fell 5%, validating the bear-case red flags flagged earlier. The 4:30 PM ET call is next.

Lululemon just reported earnings with shares initially down 7% following the report. Here are the key numbers:

• Revenue: $2.50B vs. $2.43B expected
• EPS: $1.69 vs. $1.68 expected
• Comparable Sales: +1%
• Gross Margin: 54.2% vs. 58.3% a year ago
• Operating Income: $276.9M, down 37% YoY

Guidance:

• Q2 Revenue: $2.45B-$2.48B vs. $2.59B expected
• Q2 EPS: $1.76-$1.81 vs. $2.69 expected
• FY27 Revenue: $11.00B-$11.15B vs. $11.47B expected
• FY27 EPS: $10.95-$11.15 vs. $12.29 expected

Quick read:

Lululemon beat revenue and earnings expectations, but investors are focused on a sharply lower outlook for both Q2 and the full year.

International revenue grew 22%, but Americas revenue fell 3%, and comparable sales declined 5% in the region. Gross margin contracted 410 basis points as management cited ongoing macroeconomic headwinds and lowered its FY27 outlook.

With Lululemon’s earnings results about 20 minutes away, here are some angles investors are interested in hearing about from this quarter’s results.

Key Topics Beyond the Headline

• Heidi O’Neill transition cadence following her September start date.
• Buyback pace after Q1 FY26’s $430.4 million repurchase of 1.4 million shares.
• Operating cash flow, which turned negative at -$119 million last quarter.
• Chip Wilson board cooperation pact and the two Wilson nominees added to the board.

Phrases That Would Signal Trouble

“Reset,” “rightsizing,” “promotional cadence,” or repeated use of “transitional year” would echo Jefferies’ view that a turnaround is not expected until 2027.

Options-Implied Move

Schaeffer’s pegs the expected swing at 13.8%, well above historical averages, on a stock already at a $116.63 52-week low zone.

Guidance Will Drive the Reaction

Polymarket traders price a 94.5% probability of a Q1 EPS beat versus the $1.68 consensus. The real fuel for the stock likely sits in the outlook.

Current guidance calls for full-year FY26 revenue of $11.350B-$11.500B and EPS of $12.10-$12.30, both of which exclude tariffs and a roughly $210M operating income headwind. Management has historically guided conservatively, beating Q3 FY25 EPS by 17.27%.

Bullish scenario: Raised FY26 ranges above the top end, Americas comps turning positive, and visible tariff mitigation.

Bearish scenario: EPS cut below $12.10, wider gross margin contraction beyond Q4’s 550 basis points, or inventory markdown risk against an already 18% YoY build.

Investors will watch the China comp and full-price sales commentary closely.

Lululemon (NASDAQ:LULU) reports after the bell. Here is the case on both sides.

Bull Case

• Polymarket traders are pricing a 94.5% probability of an EPS beat, backed by 14 consecutive quarterly beats.
• International remains the growth engine: China Mainland comps +30% and international revenue +17% in Q4.
• Insiders are buying. Director Charles Bergh acquired 6,090 shares at $164.20, and interim co-CEO André Maestrini bought 3,275 shares at $151.02.
• Capital returns remain aggressive, with $1.6 billion remaining on the buyback authorization.

Bear Case

• FY2026 EPS guidance of $12.10-$12.30 implies a decline from FY2025’s $13.26.
• Q4 gross margin contracted 550 basis points and operating margin fell 660 basis points.
• Guidance explicitly excludes tariff impacts, leaving room for downward revisions.
• Beats have not protected the stock; Q2 FY2026 saw a 18.58% same-day drop despite an 8.74% surprise.

Lululemon enters tonight’s earnings report with investor expectations near their lowest level in years. The stock trades at roughly 10 times earnings and sits nearly 62% below where it traded five years ago, reflecting growing concerns around slowing growth, softer consumer demand, and uncertainty surrounding leadership.

That low bar creates an opportunity. Investors are looking for evidence that the business has stabilized. Stronger-than-expected Americas comparable sales, encouraging commentary around margins, or signs that inventory and promotional activity are moving in the right direction could all help rebuild confidence.

The key question is whether management can convince investors that recent challenges are temporary rather than structural. If tonight’s results show stabilization in the core business and support the company’s longer-term growth outlook, the stock’s current valuation may begin to look overly pessimistic. If management disappoints again, however, investors may start treating the company’s reduced FY2026 guidance as the new reality, making it harder for shares to regain momentum.