lululemon: A Fall From Grace, But I'm Still Holding On (Rating Downgrade)

Gytis Zizys 4.87K Followers Follow Summary lululemon reported weak Q2 results, with revenue down 3.2% y/y and core product sales, notably leggings, declining 20%. Operational performance was propped up by one-time tariff refunds; underlying margins and comps showed significant deterioration, especially in the Americas. Guidance was cut sharply, with Q3 EPS expected below $1, raising concerns about the sustainability of LULU's premium positioning and competitive moat. I downgrade LULU to 'hold' due to ongoing operational weakness but remain attentive to turnaround potential, strong cash flow, and balance sheet flexibility. Getty Images lululemon ( LULU ) recently reported a very disappointing end to the first half of the year and didn't give us any confidence that we will see a turnaround promptly. I wanted to go over the numbers and give an This article was written by Gytis Zizys 4.87K Followers Follow MSc in Finance. Long-term horizon investor mostly with 2-5 year horizon. I like to keep investing simple. I believe a portfolio should consist of a mix of growth, value, and dividend-paying stocks but usually end up looking for value more than anything. I also sell options from time to time. Analyst’s Disclosure: I/we have a beneficial long position in the shares of LULU either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.