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Lululemon Reports Q1 2026 Results; Revenue Up 4%, EPS Down to $1.69

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Lululemon Athletica Inc. Reports First Quarter Fiscal 2026 Results

Net revenue rose 4% to $2.5 billion, though gross margin contracted sharply and earnings per share fell year-over-year. The company issued a cautious outlook for the remainder of the fiscal year.

"The company experienced a solid start to 2026 with improvements in North America." – Interim Co-CEO and CFO Meghan Frank

Key Financial Results

  • Net revenue increased 4% to $2.5 billion (2% on a constant dollar basis).
  • Americas net revenue decreased 3%; International net revenue increased 22%.
  • Comparable sales increased 1% (decreased 2% on a constant dollar basis).
  • Gross profit decreased 3% to $1.3 billion; gross margin decreased 410 basis points to 54.2%.
  • Income from operations decreased 37% to $276.9 million; operating margin decreased 730 basis points to 11.2%.
  • Diluted EPS: $1.69, compared to $2.60 in Q1 2025.
  • Effective tax rate: 31.8% (vs. 30.2% in prior year).

Balance Sheet Highlights

  • Cash and cash equivalents: $1.5 billion.
  • Inventories increased 2% to $1.7 billion; on a unit basis, inventories decreased 4%.
  • Store count: Opened 5 net new company-operated stores; total stores now 816.

Q2 and Full Year 2026 Outlook

For Q2 2026:

  • Net revenue: $2.450 billion to $2.475 billion (decline of 3% to 2%).
  • Diluted EPS: $1.76 to $1.81.
  • Assumes tax rate of approximately 30%.

For full year 2026:

  • Net revenue: $11.000 billion to $11.150 billion (decline of 1% to 0%).
  • Diluted EPS: $10.95 to $11.15.
  • Assumes tax rate of approximately 30%.
  • Guidance does not reflect potential IEEPA tariff refunds or future share repurchases.

Management Commentary

Interim Co-CEO and CFO Meghan Frank noted that the company is navigating headwinds and adjusting its full-year outlook, taking actions to reposition and strengthen its product engine.

Interim Co-CEO and President André Maestrini stated that Lululemon grew its community by entering new markets and enhancing product, brand, and guest experiences. He added that teams are focused on reigniting growth and realizing the company's full potential.