Lululemon's deterioration is deeper than the headline numbers show and looks like a brand problem, not just macro. Revenue fell 5% in constant currency to $2.42B with comps down 10%, and the 60.5% gross margin included 560bp of tariff refunds, masking a ~355bp underlying decline. The Americas fell 8% and even China mainland comps fell 8%. FY2026 guidance was cut to a 5-7% revenue decline and EPS of $9.48-9.73, versus $13.26 in 2025. x.com 

Lululemon's 20% drop does not make it a buy, because its brand is losing ground in its biggest markets and guidance collapsed. Q2 EPS beat on margins, but constant-currency comps fell 10%, with the first declines on record in China and Rest of World, after brand damage from the proxy fight, a Texas PFAS probe and a yoga event backlash. Management cut fiscal 2026 EPS to $9.48-9.73 on sales down 5-7%, and guided Q3 EPS to $0.93-0.98, about 60% below the Street's $2.37. x.com 

Lululemon's 18% premarket drop looks like an overreaction given its improving margins. x.com 

Lululemon is a value trap with no sign its business decline is reversing. Comparable sales in the Americas fell 10% in Q2 2026, worse than Nike's, and management now expects full-year revenue to fall 5-7%, with consensus estimates likely to be cut. Earnings are projected to drop to $1.3 billion by 2028, about 30% below 2025. The trailing P/E of 9x looks cheap, but the forward P/E is higher at 11x as earnings fall, despite the stock losing 75% of its peak value. x.com 

Lululemon's demand keeps deteriorating, and takeover hopes are a risky reason to hold it. It cut full-year guidance again, with Q2 revenue down 4%, Americas sales down 8% and comparable sales down 9%, sending shares below $100 for the first time since 2019. Michael Burry calls it his largest position and sees a possible private equity takeover, but a Stage 4 decline can last longer than expected, as PayPal holders learned when Stripe chose not to bid. x.com  x.com 

Lululemon is an 800lb gorilla worth defending despite bad management and the politics around its skin-tight leggings. x.com 

Lululemon is probably going lower because sales and margins are imploding while inventory grows, and a new unproven CEO is coming in. Q3 guidance calls for revenue down 10-11%, North America down mid-teens and inventory up low single digits; full-year revenue should fall 5-7% with inventory up mid single digits. Even granting $6 of annualized EPS versus a ~$4 run rate, 12x for an off-trend retailer implies about $70, versus $100 after an 18% drop. x.com  x.com 

Lululemon's core categories such as leggings fell 20%, and it is unclear whether that reflects a fashion shift toward baggy workout clothes or consumers buying better-value leggings elsewhere. With On and Deckers also sharply down, some broader consumer weakness looks likely. x.com  x.com 

Lululemon is cheap at around 11x earnings with gross margins above 50%, while many people, including the founder, are pushing for a turnaround. Sales growth is tiny, but the balance sheet is solid and the company makes an interesting acquisition target. The reported collapse of talks with founder Chip Wilson, per WSJ via @DeItaone, looks good for the stock: Wilson may try to take it private or bring in a strategic buyer. x.com  x.com 

Lululemon is no bargain at $99 and an 8x P/E, with revenue shrinking 4% and guidance slashed in two consecutive quarters. x.com