The stock of Lululemon Athletica (LULU) is down after the Canadian retailer issued forward guidance that disappointed analysts and investors.
The Vancouver-based maker of athletic apparel announced fourth-quarter 2025 financial results that surpassed Wall Street’s expectations.
For the final three months of last year, Lululemon reported earnings per share (EPS) of $5.01 U.S., which was ahead of the $4.78 U.S. expected among analysts.
Revenue in the period totaled $3.64 billion U.S., which topped the consensus forecast of $3.58 billion U.S. Sales were up 1% from a year earlier.
Despite the top- and bottom-line beats, Lululemon offered a weak 2026 outlook, citing tariffs, higher expenses, and a proxy battle with company co-founder Chip Wilson.
Management at Lululemon said that they expect sales in the current first quarter of $2.40 billion U.S. to $2.43 billion U.S. That was below estimates of $2.47 billion U.S.
Earnings per share in the current quarter are forecast at $1.63 U.S. to $1.68 U.S., which is weaker than estimates calling for $2.07 U.S.
For all of this year, Lululemon is expecting sales of $11.35 billion U.S. to $11.50 billion U.S., below Wall Street forecasts of $11.52 billion U.S.
Earnings guidance of $12.10 U.S. to $12.30 U.S. per share was also below estimates of $12.58 U.S., sending the company’s stock lower as a result.
Additionally, Lululemon said that it expects tariffs to cost the company $380 million U.S. this year, up from $275 million U.S. in 2025.
Lululemon is also involved in an ongoing fight with co-founder and major shareholder Chip Wilson, who is pressuring the company to changes its board of directors.
Before releasing its latest earnings, Lululemon announced that it is adding former Levi Strauss (LEVI) CEO Chip Bergh to its board.
Lululemon has also been targeted by activist investor Elliott Management, which has built a $1 billion U.S. stake in the company and is agitating for change.
LULU stock has declined 50% in the last 12 months, including a 25% decline this year. The company’s shares currently trade at $159.27 U.S.
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