What You Need to Know Ahead of lululemon athletica’s Earnings Release

lululemon athletica inc. (LULU), based in Vancouver, Canada, with a market capitalization of approximately $12.2 billion, is a global athletic apparel company that designs and sells technical clothing, footwear, and accessories for yoga, running, training, and other activities, focusing on product innovation, performance, comfort, and enhancing customers’ active lifestyles.

LULU is set to report its Q3 earnings soon. Wall Street anticipates diluted EPS of 97 cents, a 62.6% decrease from $2.59 in the same quarter last year. However, the company has topped analysts’ EPS expectations in each of the past four quarters, which is impressive. For fiscal 2027, analysts expect LULU to report EPS of $9.55, down 28% from $13.26 in fiscal 2026.

Over the past 52 weeks, LULU stock has declined 35.5%, substantially underperforming both the S&P 500 Index ($SPX), which advanced 12%, and the State Street Consumer Discretionary Select Sector SPDR ETF (XLY), which dipped 2.8% over the same period.

lululemon faces a securities fraud investigation by Bleichmar Fonti & Auld over allegations that it misrepresented its growth and overall business health. The investigation follows three major stock declines: a 13.3% drop on April 23, 2026, following the announcement of a new CEO; an 8.6% decline on June 5 after the company reported a 4% year-over-year drop in gross margins and slowing sales trends; and a 17.4% plunge on September 4 after reporting a 4.3% revenue decline, a 10% drop in same-store sales, and a 20% decline in sales of core products, including leggings and women’s tops.

The company also lowered its fiscal 2026 revenue, operating margin, and EPS guidance, while issuing Q3 EPS guidance 60% below analysts’ expectations. For investors, the investigation adds legal uncertainty to existing concerns about slowing growth, weakening demand, and declining profitability. However, the allegations have not been established as findings of securities fraud.

Analysts remain neutral on LULU, with the stock holding a consensus “Hold” rating. Of the 34 analysts covering the stock, only one recommends a “Strong Buy,” 25 assign a “Hold,” two suggest a “Moderate Sell,” and the remaining six rate it a “Strong Sell.” Meanwhile, the current share price of $109.82 is above the average analyst price target of $99.77.