Lululemon on pace for worst day in a year; BofA walks back its price target after earnings
Lululemon is losing market share as newer rivals hit the athleisure market.
Shares of Lululemon slid 15.2% on Friday, on pace for their worst day in a year, as investors and analysts soured on the company’s latest earnings report and guidance.
In response, Bank of America analyst Lorraine Hutchinson lowered her 2026 earnings per share forecast for the company to $15.15 from $15.43 and slashed the stock’s price target to $400 from $480 (a 17% cut). Hutchinson pointed to margin pressure as a key factor for the revision, mostly stemming from China/Mexico tariffs and FX impacts. Despite reporting a Q4 earnings beat this week, Lululemon is grappling with slowing demand as popular newcomers like Alo and Vuori capture key customers.
Still, Bank of America maintained its “buy” rating on the stock, noting that even with traffic falling, newer designs and collections like Glow Up, Daydrift, and BeCalm have been getting strong feedback from customers. That could give Lululemon the boost it needs for North American sales once traffic stabilizes.
“In contrast to peers, LULU hasn’t embedded improving US trends for the rest of the year. If this consumer soft patch proves to be short-lived, we expect better product and activations to drive sales upside,” Hutchinson said in her note.
The last time the stock dropped more than it is today was March 22, 2024, when it fell 15.8%. Lululemon shares are down more than 25% over the past year.
