# Lululemon (LULU) Q2 FY2026 earnings

Results filed 2026-09-03 for the quarter ended 2026-08-02. Source page: https://earnings.opennash.com/companies/lulu/2026-q2/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/1397187/000139718726000126/0001397187-26-000126-index.htm
> Summaries and transcripts are machine-generated and can contain errors.

## In brief

Revenue decreased 4% to $2.4 billion, or decreased 5% on a constant dollar basis, with comparable sales down 9% and diluted EPS of $2.92.

Lululemon's second-quarter revenue fell 4% to $2.4 billion, and comparable sales fell 9%. The Americas were weak, with revenue down 8% and comparable sales down 12%. International revenue rose 4%. Gross margin rose to 60.5%, helped by $134.5 million of tariff refunds. Operating income fell 13% to $453.7 million and diluted EPS was $2.92, down from $3.10. The company repurchased 2.7 million shares for $330.0 million.
Management now expects 2026 revenue of $10.350 billion to $10.500 billion, a decline of 5% to 7%, and EPS of $9.48 to $9.73. Third-quarter revenue is guided to fall 10% to 11%. The main tension is that sales are shrinking in the Americas while the company plans more marketing spending, and the full-year EPS outlook includes $0.86 per share of tariff refunds that may not recur. A new CEO, Heidi O'Neill, joins next week.

## Key numbers

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Net revenue | $2.4 billion | decreased 4%, or decreased 5% on a constant dollar basis | GAAP |
| Net income | $329,223 | compared with $370,905 in the second quarter of 2025 | GAAP |
| Diluted EPS | $2.92 | compared to $3.10 in the second quarter of 2025 | GAAP |
| Gross margin | 60.5% | increased 200 basis points | GAAP |
| Income from operations | $453.7 million | decreased 13% | GAAP |
| Operating margin | 18.8% | decreased 190 basis points | GAAP |
| Operating cash flow (first two quarters) | 589,278 | compared with 209,722 in the first two quarters of 2025 | GAAP |
| IEEPA tariff refunds recognized | $134.5 million | increased gross margin by 560 basis points | GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| Americas net revenue | decreased 8% | decreased 8% |
| International net revenue | increased 4% | increased 4%, or 2% on a constant dollar basis |
| Americas comparable sales | decreased 12% | decreased 12% |
| International comparable sales | decreased 3% | decreased 3%, or 6% on a constant dollar basis |
| Company-operated stores | 825 | nine net new stores in the quarter |

## Outlook

| Metric | Period | Outlook |
| --- | --- | --- |
| Net revenue | third quarter of 2026 | $2.290 billion to $2.320 billion |
| Diluted EPS | third quarter of 2026 | $0.93 to $0.98 |
| Tax rate | third quarter of 2026 | approximately 30% |
| Net revenue | 2026 | $10.350 billion to $10.500 billion |
| Diluted EPS | 2026 | $9.48 to $9.73 |

## Key takeaways

1. **Tariff refunds flattered margins and EPS** The $134.5 million of tariff refunds increased gross margin by 560 basis points and added $0.86 per share. Without them, gross margin and EPS would have been lower.
2. **Americas weakness drove the sales decline** Americas net revenue decreased 8% and Americas comparable sales decreased 12%. International net revenue increased 4%.
3. **Expenses grew while revenue shrank** SG&A rose to $1,006,332 thousand, or 41.7% of net revenue, from 37.7% a year earlier. Operating margin fell 190 basis points to 18.8%.
4. **Full-year outlook was revised lower** The company now expects 2026 net revenue of $10.350 billion to $10.500 billion, a decline of 5% to 7%, and EPS of $9.48 to $9.73. Third-quarter revenue is guided to decline 10% to 11%.
5. **Buybacks continued amid leadership transition** The company repurchased 2.7 million shares for $330.0 million. Incoming CEO Heidi O'Neill is due to start next week, according to the Interim Co-CEO.

## Questions

**What were Lululemon's second-quarter fiscal 2026 results?** Revenue decreased 4% to $2.4 billion and comparable sales decreased 9%. Diluted EPS was $2.92, down from $3.10 a year earlier.
**How did tariff refunds affect the quarter?** Lululemon received $134.5 million of IEEPA tariff refunds, which increased gross margin by 560 basis points and added $0.86 to diluted EPS.
**What is Lululemon's new full-year 2026 outlook?** It expects net revenue of $10.350 billion to $10.500 billion, down 5% to 7%, and diluted EPS of $9.48 to $9.73. The EPS range includes the $0.86 per share from tariff refunds and interest.
**What does Lululemon expect for the third quarter?** It expects net revenue of $2.290 billion to $2.320 billion, a decline of 10% to 11%, and diluted EPS of $0.93 to $0.98. The guidance assumes a tax rate of approximately 30%.
**Which regions are performing better or worse?** The Americas were weaker, with net revenue down 8% and comparable sales down 12%. International net revenue rose 4%, though international comparable sales fell 3%.

## Slides and investor documents

- [Financial Supplement](https://corporate.lululemon.com/~/media/Files/L/Lululemon/investors/results-center/q2-2026-financial-supplement.pdf) (Financial tables)