Lululemon Athletica Inc. LULU
Lululemon remains a hold after Q2 FY2026 (ended 2026-08-02) delivered a massive EPS beat of $2.92 versus $1.79 estimated, yet revenue still declined 4.3% year-over-year to $2.42B — the first negative revenue print in the available quarterly data. The stock trades at just 10.0x trailing earnings and 1.25x sales as of 2026-09-22, well below its 200-day moving average of $148.63, but multiple securities fraud investigations announced on September 21–23, 2026 over disclosed growth issues add a fresh overhang on top of FY2025's 13% net income decline and operating margin compression to 19.9%.
The deeply discounted valuation and strong Q2 earnings surprise argue against selling, while deteriorating top-line momentum and legal uncertainty prevent a buy. We hold pending evidence that the revenue decline is stabilizing and that the fraud investigations lack substance.
What could go wrong
- Securities fraud investigations. Multiple law firms (BFA Law, Pomerantz) announced investigations into Lululemon on Sept 21–23, 2026 regarding alleged false statements about growth and business health, creating legal and reputational overhang.
- Revenue decline. Q2 FY2026 revenue fell 4.3% YoY to $2.42B, the first negative quarterly revenue print in the available data, following FY2025 revenue growth slowing to 4.9% from 10.1% in FY2024.
- Margin compression. FY2025 operating margin compressed to 19.9% from 23.7% in FY2024, gross margin fell to 56.6% from 59.2%, and FCF margin dropped to 8.3% from 15.0%.
- Weak institutional sentiment. Smart money score is near-zero at 0.0013 as of 2026-06-30 with fund count declining to 60 from 61 the prior quarter, and the stock trades 30% below its 200-day moving average.
What would change my mind
Where this comes from: quarterly_results, quarter ended 2026-08-02 · earnings_surprises, period ended 2026-09-03 · peer_relative, as of 2026-09-22 · derived_metrics, fiscal year 2025. Orin's read on LULU; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All LULU filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $779.8M | 0.0% of fund |
| Vanguard Portfolio Management | $576.4M | 0.0% of fund |
| State Street | $515.8M | 0.0% of fund |
| Geode Capital Management | $337.9M | 0.0% of fund |
| Invesco | $266.2M | 0.0% of fund |
| Morgan Stanley | $184.8M | 0.0% of fund |
83 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 93 Form 4 filings, net $35.3M. Of the 50 on hand, 3 were open-market purchases and 1 a sale— the rest are grants, option exercises and tax withholding.
Ask Orin about LULU
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 8.4× | 39.4× | 79.6× |
| EV/EBITDA | 4.8× | 19.1× | — |
| P/S | 1.05× | 4.79× | — |
| P/B | 2.4× | 12.3× | — |
Its P/E sits below all 5 of the last 5 years (−2.14σ from its own mean).
1.4%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.9B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$98
$70 – $115 · −5% against today's price
- 27 buy or overweight
- 37 hold
- 7 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.