Lululemon Shares Plunge After Hours as Guidance Cut Overshadows Q1 Beat

Shares of Lululemon Athletica Inc. (NASDAQ: LULU) tumbled more than 10% in after-hours trading on Thursday after the athletic apparel giant delivered a mixed first-quarter fiscal 2026 report, with a slight earnings beat undermined by a steep guidance cut and deteriorating margins.

For the quarter ended May 3, 2026, lululemon posted diluted earnings per share (EPS) of $1.69, narrowly above the analyst consensus estimate of $1.67, according to Yahoo Finance. Revenue rose 4% year-over-year to $2.5 billion, also broadly in line with expectations.

However, the headline numbers masked underlying weakness: Americas net revenue fell 3%, operating income plunged 37%, and gross margin contracted 410 basis points to 54.2%, while EPS collapsed from $2.60 a year ago.

The real shock came from management’s revised full-year outlook. Lululemon now expects 2026 net revenue of $11.0–$11.15 billion, representing a decline of up to 1%, and full-year EPS of $10.95–$11.15 — a sharp markdown from the analyst consensus of $12.28 on Yahoo Finance. For Q2, guidance of $2.45–$2.475 billion in revenue implies a decline of 2–3%, with EPS of just $1.76–$1.81.

Interim Co-CEOs Meghan Frank and André Maestrini cited unspecified “headwinds” and pledged further actions to “reposition” the business, noting that North America remains a persistent drag while international growth of 22% offers a brighter spot.

LULU’s 52-week range spans $116.63 to $338.49, and analyst consensus carries a 12-month price target of $172.44, suggesting even consensus estimates face downward revision risk following today’s warning.