Don’t touch Lululemon. It’s a value trap.
Lululemon’s comparable sales in the Americas fell 10% in Q2 2026. That is even worse than Nike’s.
Consensus expects revenue to remain flat this year, but estimates will likely be revised lower. Management now expects full-year revenue to decline 5% to 7%.
Lululemon’s earnings are projected to fall to $1.3 billion by 2028, roughly 30% below the 2025 level.
The trailing P/E has fallen to 9x, into single-digit territory. But with earnings expected to decline, the forward P/E is higher at 11x.
It is hard to believe that Lululemon traded at 70x earnings just a few years ago.
The company has lost 75% of its peak market value. That may attract contrarian value investors, but there are still no signs that the negative trends in the underlying business are reversing.
