Lululemon is set to report tonight and expectations are deservedly low. One look at the ten year chart tells the Big Picture story, the one-time darling of retail (shares went up 10-fold from 2017 to 2023) is 69% off the all-time-highs and likely to guide much lower for 2027 after the bell.
Markets look forward, not back. LULU is trading like it's the next Under Armour but there's reason for hope. Here's what I'm looking for tonight, and how I intend to trade a couple possible scenarios:
The Earnings Report Tonight is Gonna Be Rough: They're reporting after the close, and everyone expects EPS to drop about 22% with US sales being flat or even down a little.
Shares are in the Toilet: The stock is at a five-year low, trading at about 10x trailing and 13x forward earnings because of the expected bad guidance. Shares are down a massive 69% from the all-time high.
The Street Hates Them: Selling has been non-stop thanks to market issues and the company just making dumb moves. Barely anyone—only 18% of analysts—rates the stock a "Buy."
Merchandise is a Mess: Stores look tired, and the new stuff is totally weird. They were the king of athleisure but now they're trying out rugby shirts, bad denim, and those bizarre khaki suit sets with slip-on shoes. Why?
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