Lululemon North America Comparable Sales Fall 12% as BMO Cuts to Underperform

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Summary · why it matters

Lululemon's North America comparable sales fell 12% year over year in the second quarter of 2026 while net revenue in the region dropped 8%, prompting BMO Capital Markets to slap an underperform rating on the stock with a $70 price target. On a Sept. 9 earnings call, Chief Financial Officer Meghan Frank said a shift in customer demand from tighter athletic wear to looser fits drove a 20% decline in leggings sales, compounded by negative media and social commentary that hurt traffic and softer-than-planned responses to new product launches. BMO analyst Kelly Crago wrote that Lululemon's irrelevance with the consumer is showing up in the numbers, and said the company is losing market share across the Americas and China to smaller rivals Alo Yoga and Vuori; Lululemon's market share dipped 10 percentage points to 43.9% in August, while Alo Yoga and Vuori gained 5.9 percentage points and 2.2 percentage points respectively, according to a Reuters report citing M Science data. The BMO downgrade followed BofA Global Research's Sept. 4 cut of its price objective on Lululemon from $140 to $122, with analyst Lorraine Hutchinson maintaining a neutral rating while trimming her earnings-per-share forecast by 13% for fiscal year 2026 and 31% for fiscal year 2027. Lululemon is betting its turnaround on looser-fitting styles such as the Groove Wide-Leg and Align Foldover Jogger, new cold-weather outerwear, fewer SKUs, and increased marketing, while planning to raise markdowns by roughly 60 basis points in the third quarter; the company expects U.S. revenue to be down in the low double digits for the full year of 2026, and new CEO Heidi O'Neill, who took over on Sept. 8, will review the strategy.

Impact on stocks 3

Financials▼ · 2 stocks
Bank of America Corp
BAC
▼ NegativeCapitalrelevance

BofA Global Research cut its price objective on Lululemon from $140 to $122 and trimmed EPS forecasts, a negative analyst valuation event for the firm's coverage.

Bank of Montreal
BMO
▼ NegativeCapitalrelevance

BMO Capital Markets slapped an underperform rating on Lululemon with a $70 price target, a negative analyst call from the bank.

Consumer Discretionary▼ · 1 stocks
Lululemon Athletica Inc.
LULU
▼ NegativeCompetitionDemandrelevance

Lululemon is losing market share in the Americas and China to smaller rivals Alo Yoga and Vuori, with its share dipping 10 points to 43.9%.

Off-coverage companies 2

Alo YogaPrivate▲ Positive
Competitionrelevance

Alo Yoga gained 5.9 percentage points of market share as Lululemon lost ground in the Americas and China.

VuoriPrivate▲ Positive
Competitionrelevance

Vuori gained 2.2 percentage points of market share as Lululemon lost ground in the Americas and China.

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