Lululemon Athletica Inc (NASDAQ:LULU) stock rose 3.11% (As on March 18, 11:17:23 AM UTC-4, Source: Google Finance) after the company reported fourth quarter results that exceeded Wall Street expectations, supported by stronger-than-anticipated earnings and continued growth in its international business, but provided current quarter and full year 2026 revenue guidance that fell short of expectations. The athleisure apparel maker’s results come at a time when consumers have largely pulled back on discretionary spending amid elevated interest rates, inflationary pressures, and geopolitical crises. Lululemon’s Americas business in particular has shown little signs of improvement. Quarterly comparable sales improved 3%, largely driven by a 20% surge in comparable sales in the international business. Americas comparable sales fell 1%.
Moreover, the company is focused on executing on the action plan, offering new and differentiated products to the guests, and elevating their experiences with lululemon. Driving improvement in the full-price sales over the course of 2026 is also a key priority, particularly in North America. The company’s results also come at a time when it is struggling with a proxy battle mounted by its founder and one of its largest shareholders, Chip Wilson. Lululemon is also without top leadership, after Calvin McDonald stepped down as chief executive at the end of January. Further, the company is facing serious challenges both internally and externally—some of which are self-inflicted, like its ongoing merchandising issues, while others reflect the weakening environment for athleisure. Lululemon separately said it was appointing former Levi Strauss top boss Chip Bergh to its board. The company’s biggest weakness is on the merchandising side. Its lack of compelling product and continued missteps have hurt brand trust while undermining its premium positioning.
LULU in the fourth quarter of FY 25 has reported the adjusted earnings per share of $5.01, beating the analysts’ estimates for the adjusted earnings per share of $4.78. The company had reported the adjusted revenue of $3.6 billion in the fourth quarter of FY 25, beating the analysts’ estimates for revenue of $3.58 billion.
Looking ahead, Lululemon issued a relatively modest outlook. For the first quarter of 2026, the company expects revenue between $2.4 billion and $2.43 billion, representing growth of 1% to 3%, with diluted earnings per share projected at $1.63 to $1.68.
For the full year, Lululemon forecast revenue of $11.35 billion to $11.50 billion, implying growth of 2% to 4%, and earnings per share of $12.10 to $12.30. The revenue outlook is slightly below the consensus $11.52 billion.