TLDR
- LULU stock fell 17.4% in a single day to close at $100.61, now down roughly 80% from its all-time high of $511.29
- Q2 sales fell 4% to $2.4 billion, with store sales dropping 9%; EPS of $2.92 included a one-time $134.5 million tariff refund
- Full-year 2026 revenue guidance cut to $10.35 billion, down from $11.35 billion projected in March, the third cut this year
- Founder Chip Wilson filed for divorce without a prenup, putting a 9.9 million share stake worth nearly $1 billion into court proceedings
- Wall Street rates LULU a Hold, with an average price target of $103.37, implying just 2.74% upside from current levels
Lululemon stock closed at $100.61 on Monday, down 17.4% in a single session. That puts the stock roughly 80% below its December 2023 record high of $511.29.
Lululemon Athletica Inc., LULU
The selloff came after the company reported second-quarter results that missed expectations and cut its full-year outlook for the third time in 2026.
Q2 net revenue came in at $2.4 billion, a 4% decline from the same period last year. Store sales fell 9%. Earnings per share of $2.92 included a one-time $134.5 million tariff refund, which propped up the bottom line number.
Without that refund, the core business picture looks harder. Management acknowledged weaker customer demand, a softer response to new product launches, and rising competition in the North American market.
Guidance Cut Rattles Investors
Lululemon now expects full-year 2026 net revenue of $10.35 billion to $10.50 billion. That compares to the $11.35 billion target set back in March. The updated EPS guidance of $9.48 to $9.73 includes $0.86 per share from tariff refunds and interest already booked in Q2.
Third-quarter revenue is projected to fall 10% to 11%, landing between $2.29 billion and $2.32 billion.
Management is also pulling back on its pop-up store footprint and being more selective on new store openings. That may help protect margins, but it limits upside if demand picks up.
Incoming CEO Heidi O’Neill is stepping into a difficult operating environment with North American store traffic trending down.
Founder Divorce Adds Legal Uncertainty
On top of the earnings pressure, court reports confirmed that founder Chip Wilson and his wife Shannon “Summer” Wilson filed for divorce in British Columbia without a prenuptial agreement.
The couple married in 2002, five years before Lululemon went public in 2007. Under British Columbia law, assets accumulated during a marriage are split equally by default.
Chip Wilson and related entities hold 9.9 million shares, representing an 8.7% voting stake in the company. At Friday’s close, that block was worth just under $1 billion. Summer Wilson already holds roughly 1.1 million of those shares directly.
The legal case puts a major voting bloc inside a sealed courtroom. This comes just months after Chip Wilson accepted two board seats at the company.
Wall Street currently rates LULU a Hold, based on zero Buy ratings, 19 Holds, and three Sell ratings. The average price target of $103.37 implies about 2.74% upside from the current price of $100.61.
Analysts on the bearish end of the spectrum have modelled revenue falling as low as $9.7 billion by 2029, well below the consensus forecast of $12.2 billion.
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