LULU Stock Plummets 18% Overnight
Lululemon reported fiscal Q2 2026 earnings Wednesday evening and the stock fell 18 percent in after-hours trading, dropping from $121.77 to approximately $99.65 and breaching its 52-week low, as the company delivered its third consecutive guidance cut of the year on a night when almost nothing went right.
Revenue fell 4 percent year over year to $2.42 billion, missing the $2.46 billion consensus. Comparable sales declined 9 percent.
Sales of leggings, the product that built the brand, fell roughly 20 percent. North America continued to deteriorate. China grew just 4 percent, its slowest pace in years.
Full-year revenue guidance was slashed to $10.35 to $10.50 billion, now implying a decline of 5 to 7 percent for the year. Q3 guidance of $2.29 to $2.32 billion implies a 10 to 11 percent year-over-year revenue drop with mid-teens declines in North America.
Adjusted EPS of $2.92 beat estimates, but $0.86 of that came from a one-time tariff refund of $134.5 million.
The results land the week before Nike veteran Heidi O'Neill takes over as CEO. The stock is now down more than 40 percent for 2026.
The unexpected entertainment: Michael Burry, of The Big Short fame, holds LULU as his largest portfolio position at 17.4 percent. He posted on Substack Wednesday calling Lululemon "a trickster" and said: "I continue to hold lululemon, and I will buy more of it if it trades under $100 tomorrow morning."
It traded under $100. The man who shorted the housing market is now the world's most famous Lululemon bull.
