# Lululemon (LULU) Q1 FY2026 earnings

Results filed 2026-06-04 for the quarter ended 2026-05-03. Source page: https://earnings.opennash.com/companies/lulu/2026-q1/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/1397187/000139718726000077/0001397187-26-000077-index.htm
> Summaries and transcripts are machine-generated and can contain errors.

## In brief

Lululemon's first-quarter fiscal 2026 revenue increased 4% to $2.5 billion and diluted EPS was $1.69, while income from operations decreased 37% to $276.9 million.

Lululemon grew revenue 4% to $2.5 billion in the first quarter, or 2% in constant dollars. International sales rose 22%, but Americas revenue fell 3%. Gross margin fell 410 basis points to 54.2%, and selling, general and administrative costs rose to 42.9% of revenue. Income from operations fell 37% to $276.9 million, and diluted EPS dropped to $1.69 from $2.60. Operating cash flow was $214,440 thousand, versus a $118,954 thousand outflow a year earlier.
Management lowered its full-year outlook, now expecting net revenue of $11.000 billion to $11.150 billion (down 1% to flat) and diluted EPS of $10.95 to $11.15. For the second quarter it expects revenue of $2.450 billion to $2.475 billion, a 3% to 2% decline, and EPS of $1.76 to $1.81. The main tension is a weak Americas business and shrinking margins against fast international growth. Guidance excludes any IEEPA tariff refunds and future share repurchases.

## Key numbers

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Net revenue | $2.5 billion | up 4% from a year ago, or up 2% on a constant dollar basis | GAAP |
| Net income | $195,048 | down from $314,572 a year ago | GAAP |
| Diluted EPS | $1.69 | down from $2.60 in the first quarter of 2025 | GAAP |
| Gross margin | 54.2% | down 410 basis points | GAAP |
| Income from operations | $276.9 million | down 37% from a year ago | GAAP |
| Operating margin | 11.2% | down 730 basis points | GAAP |
| Net cash provided by operating activities | $214,440 | compared with net cash used of $118,954 a year ago | GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| Americas net revenue | decreased 3% | decreased 4% on a constant dollar basis |
| International net revenue | increased 22% | increased 16% on a constant dollar basis |
| Comparable sales | increased 1% | decreased 2% on a constant dollar basis |
| Americas comparable sales | decreased 5% | decreased 6% on a constant dollar basis |
| International comparable sales | increased 13% | increased 8% on a constant dollar basis |
| Company-operated stores | 816 stores | five net new stores opened in the quarter |

## Outlook

| Metric | Period | Outlook |
| --- | --- | --- |
| Net revenue | second quarter of 2026 | $2.450 billion to $2.475 billion |
| Diluted EPS | second quarter of 2026 | $1.76 to $1.81 |
| Tax rate | second quarter of 2026 | approximately 30% |
| Net revenue | 2026 | $11.000 billion to $11.150 billion |
| Diluted EPS | 2026 | $10.95 to $11.15 |
| Tax rate | 2026 | approximately 30% |

## Key takeaways

1. **Profit fell sharply despite higher revenue** Net revenue increased 4% to $2.5 billion, but income from operations decreased 37% to $276.9 million and diluted EPS fell to $1.69 from $2.60.
2. **Gross margin fell 410 basis points** Gross margin was 54.2% versus 58.3% a year earlier, and SG&A rose to 42.9% of net revenue from 39.8%.
3. **International growth offset Americas weakness** International net revenue increased 22% while Americas net revenue decreased 3% and Americas comparable sales decreased 5%.
4. **Full-year outlook was lowered** Management now expects 2026 net revenue of $11.000 billion to $11.150 billion and diluted EPS of $10.95 to $11.15, citing headwinds navigated more recently.
5. **Operating cash flow turned positive** Net cash provided by operating activities was $214,440 thousand versus $118,954 thousand used a year ago, and the company repurchased 2.2 million shares for $358.3 million.

## Questions

**What were Lululemon's first-quarter fiscal 2026 results?** Net revenue increased 4% to $2.5 billion, or 2% in constant dollars, and diluted EPS was $1.69 versus $2.60 a year earlier. Income from operations decreased 37% to $276.9 million.
**What happened to Lululemon's margins?** Gross margin decreased 410 basis points to 54.2%, and operating margin decreased 730 basis points to 11.2%. SG&A rose to 42.9% of net revenue from 39.8%.
**How did Lululemon's regions perform?** Americas net revenue decreased 3% and Americas comparable sales decreased 5%. International net revenue increased 22%, with China Mainland up 30% and comparable sales up 13% internationally.
**What is Lululemon's guidance for the second quarter and full year?** For the second quarter it expects net revenue of $2.450 billion to $2.475 billion and diluted EPS of $1.76 to $1.81. For 2026 it now expects net revenue of $11.000 billion to $11.150 billion and diluted EPS of $10.95 to $11.15.
**What does the guidance exclude?** The guidance does not reflect any potential IEEPA tariff refunds or future repurchases of the Company's shares. It also assumes a tax rate of approximately 30%.