Lululemon Q3 Earnings Preview: Leadership Shakeup, Tariffs And Key Metrics To Watch

Lululemon Athletica Inc (NASDAQ:LULU) stock is trading lower Thursday morning before its fiscal third-quarter earnings release. Here’s what investors need to know.

• Lululemon Athletica stock is trading at depressed levels. What should traders watch with LULU?

What To Know: Investors are approaching the afternoon earnings report with caution. The company faces headwinds including slowing sales growth, weaker U.S. demand and margin compression driven by tariffs.

Telsey Advisory Group notes that while Lululemon is working to refresh its core collection, meaningful benefits from these “newness” initiatives may not materialize until 2026.

For the third-quarter, analysts expect revenue of roughly $2.48 billion and EPS of $2.21. Market sentiment remains mixed. While Telsey maintained a $200 price target, Guggenheim initiated coverage on Wednesday with a Neutral rating.

All eyes will be on management’s commentary regarding holiday guidance and strategies to reverse U.S. underperformance when results drop after the bell.

Why Tariffs Matter: Tariffs have become a critical pressure point for Lululemon, driving a sharp margin squeeze that is actively eroding the company’s profitability. Specifically, the retailer is grappling with the removal of the de minimis exemption, a trade loophole that previously minimized duties on low-value imports.

Telsey Advisory Group attributes Lululemon’s weakened earnings outlook largely to this policy shift, noting that mitigation strategies, such as vendor negotiations and pricing adjustments, are weighted toward the back half of the year.

Despite these efforts, analysts warn that the cost offsets will likely remain incomplete, extending margin headwinds into fiscal 2026 and complicating the company’s near-term financial recovery.

What Else: The retailer last month revealed that Celeste Burgoyne, President of the Americas and Global Guest Innovation, will depart the company to pursue an opportunity outside the industry.

Consequently, André Maestrini, formerly EVP of International, has been named President and Chief Commercial Officer, effective immediately, taking on integrated oversight of global regions and commercial strategy.

Benzinga Edge Rankings: Benzinga Edge rankings highlight the stock’s current divergence, showing a robust Growth score of 91.67 that is heavily contrasted by a weak Momentum rating of just 9.15.

LULU Price Action: Lululemon Athletica shares were down 1.42% at $184.95 at the time of publication on Wednesday, according to Benzinga Pro data.

The stock is currently trading approximately 6.5% above its 50-day moving average of $173.61, indicating a relatively strong short-term momentum.

However, it is trading about 20.5% below its 200-day moving average of $232.78, suggesting that the longer-term trend remains bearish.

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