LULU Earnings Miss: Guidance Cut & Analyst Downgrades

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Key Drivers of the LULU Stock Move

Lululemon (LULU) stock dropped nearly 20% after Q2 earnings
EPS beat ($3.10 vs $2.90 est) but revenue missed ($2.525B vs $2.538B est)
FY2025 guidance cut on tariff concerns and removal of the de minimis exemption

LULU reported Q2 earnings after the close on September 4th, beating EPS estimates ($3.10 vs $2.90 expected) but falling short on revenue estimates ($2.525B vs $2.538B expected). The company meaningfully cut FY2025 guidance, lowering EPS guidance from $14.58-$14.78 to $12.77-$12.97 and revenue guidance from $11.150B-$11.300B to $10.850B-$11.000B. Management cited concerns over higher tariff rates and removal of the de minimis exemption, estimating a $320M impact on 2026 operating margins.

lulu chart during earnings — $LULU Earnings Chart

LULU Unusual Options

Bearish sentiment was strong in options markets with big put buying. Some of the trades that stood out were $117.8K in September 5th $200 puts, $284.5K in September 5th $200 puts, and $452.8K in December 19th $190 puts. The unusual activity suggests investors are betting on further downside despite the stock’s recent performance.

LULU Seasonality

Based on data since September 2020, LULU’s September performance shows it was positive 50% of the time, but with a -4.84% average decline. October is an excellent month for LULU, with 80% positive periods and 8.3% average gains, and November is also strong, showing a 10% average gain for the last five years.

LULU Relative Performance

LULU’s relative performance against the SPX has also taken a significant hit, declining from over 19% outperformance in early July to just 0.4% in early September. This decline is reflective of broader concerns about the company’s growth prospects and competitive position.

Analyst Focus

Recent analyst activity has seen widespread concern with multiple downgrades. UBS lowered targets from $290 to $240, Wells Fargo cut from $225 to $205, and Morgan Stanley lowered from $280 to $223. Bank of America maintained a buy rating but lowered targets from $370 to $300. The median price target of recent ratings is approximately $255.