Lululemon Athletica, Inc. reportedly experienced a solid start to 2026, with net revenue increasing 4 percent to $2.5 billion in the fiscal first quarter ended May 3, or a 2 percent increase on a constant-dollar basis.

  • Americas net revenue decreased 3 percent, or 4 percent on a constant-dollar basis.
  • International net revenue increased 22 percent, or 16 percent on a constant-dollar basis.

Comparable sales increased 1 percent or decreased 2 percent on a constant-dollar basis.

  • Americas comparable sales decreased 5 percent, or 6 percent on a constant-dollar basis.
  • International comparable sales increased 13 percent, or 8 percent on a constant-dollar basis.

“We experienced a solid start to 2026 as our teams executed with speed, agility, and discipline,” commented CFO and Interim Co-CEO Meghan Frank. “Our work to drive improvements in North America resulted in some positive signals in the quarter, including a sequential improvement in full-price sales. More recently, we have been navigating headwinds that have led us to adjust our full-year outlook. We have assessed the business and are taking additional actions to reposition where needed and further strengthen our product engine. We remain confident in our path forward.”

André Maestrini, interim co-CEO, president, and chief commercial officer, said the company continued to grow the Lululemon community as it entered new markets and elevated product, brand, and guest experiences worldwide.

“This work included delivering successful product capsules and activations across train, tennis, and run, as well as implementing enhancements across our store fleet and digital channels that we will build upon in the months ahead. We recognize that we have more work to do, and our teams remain focused on our priorities as we continue our efforts to reignite growth and realize Lululemon’s full potential.”

Profitability and Expenses

  • Gross profit decreased 3 percent to $1.3 billion, and gross margin decreased 410 basis points to 54.2 percent.
  • Income from operations decreased 37 percent to $276.9 million, and operating margin decreased 730 basis points to 11.2 percent.
  • Diluted earnings per share were $1.69 compared to $2.60 in the first quarter of 2025.
  • The effective income tax rate for the first quarter of 2026 was 31.8 percent compared to 30.2 percent for the first quarter of 2025.

Balance Sheet Summary
LULU ended the first quarter of 2026 with $1.5 billion in cash and cash equivalents and had $593.6 million of available capacity under its committed revolving credit facility.

Inventories at the end of the first quarter increased by 2 percent to $1.7 billion compared to the end of the first quarter of 2025. On a unit basis, inventories decreased 4 percent.

LULU repurchased 2.2 million of its shares for a cost of $358.3 million.

Stores
The company opened 5 net new company-operated stores during the first quarter, bringing its total to 816.

2026 Outlook
For the second quarter of 2026, the company expects net revenue to be in the range of $2.450 billion to $2.475 billion, representing a decline of 3 percent to 2 percent. Diluted earnings per share are expected to be in the range of $1.76 to $1.81 for the quarter. This assumes a tax rate of approximately 30 percent.

For 2026, the company now expects net revenue to be in the range of $11.000 billion to $11.150 billion, representing a decline of 1 percent to 0 percent. Diluted earnings per share are now expected to be in the range of $10.95 to $11.15 for the year. This assumes a tax rate of approximately 30 percent.

The company said the guidance does not reflect any potential IEEPA tariff refunds or future repurchases of the company’s shares.

LULU shares were down ~10 percent in after-hours trading on Thursday, June 4, after the company issued Q2 revenue guidance that came in 5.1 percent below analysts’ estimates.

Image courtesy Lululemon Athletica, Inc.

See below for additional Lululemon coverage from SGB Executive, including insights from interim co-CEOs Meghan Frank and André Maestrini about the Q2 headwinds affecting the business.

EXEC: Lululemon Co-CEOs Talk Through Hits and Misses Going into Second Quarter