Lululemon (LULU) did not wait for the jobs report to ruin Friday.
After the bell Thursday, the company cut its year again. Shares were down about 18% in overnight trade, near $100, after closing Thursday a little higher. The stock has dropped almost 69% since early 2025. That is not a bad quarter. That is a lost identity.
The print
Quarter ended August 2:
- Revenue: $2.42 billion, down 4%
- Comparable sales: โ9% (โ10% in constant dollars)
- Americas comps: โ12%. That is the mother ship.
- EPS: $2.92, down from $3.10, including $0.86 a share from IEEPA tariff refunds and interest
- Gross margin 60.5%, up 200 basis points โ because those refunds added 560 basis points. Without the gift, the margin story is the other way.
- Operating margin 18.8%, down 190 bps anyway
- $1.4 billion cash. Bought back 2.7 million shares for $330 million. Inventory units โ7%.
Interim co-CEO and CFO Meghan Frank called it prudent. The guide is what the stock heard.
The guide, twice
Q3: sales $2.29โ$2.32 billion, down 10โ11%. EPS $0.93โ$0.98.
Full year: sales $10.35โ$10.50 billion, down 5โ7% (was flat to โ1%). EPS $9.48โ$9.73 (was $10.95โ$11.15), and that includes the $0.86 tariff-refund sugar.
China comps were โ8% in constant dollars. Rest of World grew. The hole is America, and specifically core leggings, down about 20%. โAway-from-bodyโ styles are working. They are not filling a 20% crater.
Mondayโs job
Heidi OโNeill becomes CEO September 8. She inherits a product problem, not a balance-sheet problem. Yoga pants were the company. The company needs a new sentence.
What this means for you
If you wear the gear, nothing about a 18% overnight print changes the pants. If you own the stock, this is the second straight quarter they told you the year is smaller. Tariff refunds are not a growth plan.
Bottom line: the brand still prints cash. It is no longer printing growth. That is why it is on the down list, jobs report or not.
GLHR NEWS explains the news. Not investment, tax, or trading advice. Do your own work before you act.
