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Live: Will Lululemon’s Q2 Earnings Tonight Restore Confidence Ahead of Its New CEO?

By Thomas Richmond · Updated Sep 3, 3:50pm ET · Published Sep 3, 3:17pm ET

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Lululemon Stock Is Down 24% Since Last Quarter

LULU Lululemon
Last quarter — Q4 FY2026
EPS
$5.01vs $4.78 est +4.8%
Revenue
$3.64Bvs $3.58B est +1.8%
Earnings-day move -0.4%Since report -23.6%

Lululemon cleared both lines last quarter and got nothing for it, and the slide since then says investors stopped paying for beats and started pricing in an Americas demand problem instead. That is why tonight's guidance and North American commentary carry more weight than another EPS beat.

Price since the report
$172$136$100

Reported Tue, Mar 17 · next print Thu, Sep 3

Traders Are Bearish on Lululemon With a 1.20 Put/Call Ratio

LULU Lululemon
Options positioning
Put/call 1.20Puts dominant
CallsPuts
ATM implied vol
157.6%
Expiry
Fri, Sep 4chain as of Wed, Sep 2

A 1.2 put/call ratio into Friday expiration says traders are paying up for downside protection around the $121 at-the-money strike, though ratios that skewed can just as easily mark the crowd already positioned for bad news. ATM implied volatility near 158% means the options market is bracing for a violent reaction either way, with the heaviest put open interest stacked at $118 and $123.

Open interest near the money · puts / calls
  • $118
    527 / 160
  • $119
    296 / 123
  • $120
    669 / 758
  • $121
    74 / 255
  • $122
    235 / 251
  • $123
    491 / 238

What Wall Street Wants to Hear From Lululemon Tonight

Consensus sits at $1.79 EPS on $2.46B revenue, but the full-year framework matters more. Management already reset the full-year 2026 outlook to $11B-$11.15B in revenue and $10.95-$11.15 diluted EPS, down from $13.26 in FY2025.

Lululemon Athletica (NASDAQ:LULU) has historically guided conservatively, excluding tariff impacts from headline numbers.

Bullish vs Bearish Scenarios

Bullish guidance would hold North America to the high-single-digit annual decline, sustain approximately 20% China growth, and flag tariff mitigation. Investors also want stability on the approximately 380 basis point operating margin compression.

A bearish outcome would be another EPS cut below $10.95, deeper Americas comp erosion, or wider markdowns.

With shares already down 42.22% YTD, guidance dictates whether incoming CEO Heidi O’Neill inherits a stock ready to rebound or a falling knife.

Lululemon's Bull vs Bear Case Ahead of Tonight's Q2 Earnings Results

Bull Case: Why a Beat Could Reset the Narrative

  • China and international momentum: Q1 FY2026 China mainland revenue rose 30%, with full-year China guidance intact at approximately 20% growth.
  • Low expectations: Consensus EPS sits at just $1.79 after 16 downward revisions in 30 days, and shares trade at a 10 P/E.
  • Crowd conviction: Polymarket puts beat odds at 0.91, and insiders are net buying.

Bear Case: Why Confidence May Stay Broken

  • North America still deteriorating: Q2 guidance calls for U.S. revenue to decline in the low double digits.
  • Margin collapse: Q2 gross margin is guided down approximately 410 basis points; operating margin drops to 11.6%.
  • Post-beat selling pattern: Beats averaged a -5.89 earnings-day reaction.
  • YTD damage: Shares are down 42.22% YTD, leaving little room for a guidance cut before Heidi O’Neill arrives.

Lululemon Q2 Earnings Tonight: North America Is the Number to Watch

Lululemon is expected to report earnings at 4:05 PM ET, and the biggest question is whether its struggling North American business is stabilizing.

Management previously guided to low-double-digit declines in North American full-price sales, while tariffs and markdowns are expected to pressure gross margin by roughly 410 basis points this quarter.

The report also comes during a major leadership transition. Interim co-CEOs are preparing to hand control to incoming CEO Heidi O’Neill this month, putting even more attention on management’s outlook and commentary.

Lululemon now trades around 10 times earnings, reflecting how far investor confidence has fallen. An earnings beat paired with signs of stabilization in North America could begin resetting the narrative. Another guidance cut would deepen the company’s credibility problem heading into its new CEO era.

This article is updated throughout the trading day. Check back for more.

Full Coverage

The story so far

Lululemon (NASDAQ:LULU | LULU Price Prediction) is expected to report fiscal Q2 results after the bell today at 4:05 PM ET. Shares are down about 40% year to date, leading Michael Burry to call the stock “screaming cheap.”

LULU price target

Sentiment Meets Margin Reset

Last quarter, the athletic-apparel maker posted revenue of $2.5 billion with comparable sales down 2% and diluted EPS of $1.69 versus $2.60 a year earlier. Gross margin contracted to 54.2% from 58.3%, and operating margin dropped to 11.2% from 18.5%, pressured by tariffs and fixed-cost deleverage.

Management cited “spikes of negative commentary in the media and on social channels” and product launches that underdelivered. Traffic softened over the last 6-7 weeks of the quarter. Shares fell 8.56% on the reaction, extending a rout that has pulled the stock 40.03% lower over one year.

Consensus Estimates

Metric Q2’26 Estimate YoY Change FY26 Estimate FY27 Estimate
Revenue $2.46B -2.6% $11.04B $11.34B
EPS (Normalized) $1.7902 -42.3% $11.03 $11.46

The consensus sits inside management’s own Q2 range of $1.76 to $1.81, so the bar is set at the guide. Analyst EPS estimates for the full year have been cut from $12.30 ninety days ago to $11.03. That reset reframes any beat as damage control rather than momentum.

What I’m Watching Tonight

Tonight, I’ll be watching how management frames the North America trajectory. Management guided the region to a low double-digit revenue decline in Q2 and expects markdowns to peak this quarter before improving sequentially.

Investors are also going to focus on the company’s gross margin. Tariffs alone carry a 150 basis point gross negative impact this quarter, with 100 basis points of offsets. The company is modeling a 20% back-half incremental tariff rate, and any shift there flows straight to the FY EPS range.

Mainland China is another pillar. Management guided to mid-to-high teens growth in Q2 and roughly 20% for the year, with activations including the Great Wall Yoga Experience. Sustainability of this trend after April’s brand disruption will define the international thesis.

I’ll also watch inventory. Q1 dollar inventory grew 2% while units fell roughly 4%. Cleaner units support the promised markdown moderation. Finally, analysts will listen for the tone on the new CEO Heidi O’Neill appointment and any early strategic direction.

Earnings History

Quarter EPS Surprise 1-Day Move 7-Day Move 30-Day Move
Q1 27 n/a -8.56% +3.97% +2.00%
Q4 26 +4.8% -0.40% +1.05% +5.03%
Q3 26 +17.27% +9.60% +2.19% +0.02%
Q2 26 +8.74% -18.58% -4.73% +3.20%
LULU earnings explorer

On average, shares moved -2.9% seven days after earnings across the past six reports.

Contact [email protected] for any questions or corrections.

Thomas Richmond

Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.

Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.

He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.

His work has also been featured on platforms including Seeking Alpha and Sure Dividend.

Outside of work, Thomas enjoys weight lifting and soccer.

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