Jonah Lupton
CEO & CIO of FirstWave Capital, Long-Biased Growth
Lululemon is a classic value trap: EPS guidance fell by a third, so a lower share price is no cheaper, and with EPS likely flat or down for 2-3 years it may need to test the low $80s. Dozens of influencer-led apparel brands selling through Shopify, plus Alo, Vuori and GymShark, offer better products at lower prices without its costly store base. Its mediocre products at premium prices cannot win that fight, and a quick turnaround is unlikely. x.com x.com x.com x.com x.comÂ
Lululemon is turning into a soccer-mom brand, losing the 16-to-35-year-old women who pay up for status brands. As a public company it must expand margins, so quality has been cut, and almost every woman will say it is much worse than five-plus years ago. Private rivals such as Alo and Vuori, the latter two backed by SoftBank, can likely accept much lower margins while they scale. Expanding into larger sizes probably also pushed core customers toward cooler emerging brands. x.com x.comÂ
Lululemon is not worth bottom-fishing even though the bad news will eventually be priced in, because forward estimates keep falling and a bottom is hard to time before fundamentals bottom. The business is not a zero: its stores are still busy, if less than before. There are better places to look for a bargain. x.com x.com x.comÂ
Lululemon is not that tempting even after falling from $500 to about $100, because cheap does not mean buy. At about 1x sales the market prices in roughly zero growth, and analysts expect about $13 of EPS by 2029; at an 8x P/E that is only about $104. Agreeing with @HKIStrategies that the stock may simply move sideways for years, that would still mean losing money to inflation. x.com x.comÂ
Lululemon is an 800lb gorilla worth defending despite bad management and the politics around its skin-tight leggings. x.comÂ
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.comÂ
Lululemon, Nike, Under Armour and On look like cursed value traps because rising competition and unpredictable fashion trends keep eroding their positions. Lululemon has lost its niche dominance as the luxury standard and is now one of a dozen rivals, such as Vuori, Alo and Athleta, chasing the same buyers. Lululemon sits at six-year lows, Nike at 12-year lows, Under Armour at all-time lows and On back at 2022 levels. The products may still be good, but competition is overwhelming. x.com x.com … Show more
Lululemon's 18% premarket drop looks like an overreaction given its improving margins. x.comÂ
Lululemon is no bargain at $99 and an 8x P/E, with revenue shrinking 4% and guidance slashed in two consecutive quarters. x.comÂ
lululemon's 9.4 times forward earnings looks like a value trap, because US brand fatigue may be structural rather than cyclical. A 44% drop this year and a low multiple invite bets on mean reversion that may not come. x.comÂ
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.comÂ
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.comÂ
