lululemon athletica inc. Announces Second Quarter Fiscal 2026 Results

This press release is provided by Business Wire and is published as received.

VANCOUVER, British Columbia--(BUSINESS WIRE)-- lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the second quarter of fiscal 2026, which ended on August 2, 2026.

Meghan Frank, Interim Co-CEO and Chief Financial Officer, stated: “While we continue to navigate some challenging dynamics, we are taking a prudent approach with our revised full-year outlook. Our teams remain focused on accelerating growth by strengthening our product offerings, increasing our marketing investments, and maintaining disciplined expense management. Looking ahead, we have confidence in the strength of the lululemon brand, the deep connection we have with our guests and ambassadors, and the significant opportunities we see to drive long-term growth.”

André Maestrini, Interim Co-CEO, President, and Chief Commercial Officer, stated: “We remain confident in our ability to take the right steps to strengthen our performance and deliver sustainable growth over time. I would like to thank our teams around the world for their focused efforts and continued commitment to lululemon. We look forward to welcoming our incoming CEO, Heidi O’Neill, next week as we begin an exciting new chapter for the company.”

For the second quarter of 2026, compared to the second quarter of 2025:

Net revenue decreased 4% to $2.4 billion, or decreased 5% on a constant dollar basis. Americas net revenue decreased 8%. International net revenue increased 4%, or 2% on a constant dollar basis. Comparable sales decreased 9%, or 10% on a constant dollar basis. Americas comparable sales decreased 12%. International comparable sales decreased 3%, or 6% on a constant dollar basis. Gross profit decreased 1% to $1.5 billion and gross margin increased 200 basis points to 60.5%. This includes $134.5 million of tariff refunds(1) which increased gross margin by 560 basis points. Income from operations decreased 13% to $453.7 million and operating margin decreased 190 basis points to 18.8%. The tariff refunds(1) of $134.5 million increased operating margin by 560 basis points. The effective income tax rate for the second quarter of 2026 was 29.6%, compared to 30.5% for the second quarter of 2025. Diluted earnings per share were $2.92 compared to $3.10 in the second quarter of 2025. This includes $0.86 per share related to tariff refunds and associated interest(1), net of tax. The Company repurchased 2.7 million of its shares for a cost of $330.0 million. The Company opened nine net new company-operated stores during the second quarter, ending with 825 stores.

__________(1) During the second quarter of 2026, the Company received International Emergency Economic Powers Act ("IEEPA") tariff refunds of $134.5 million plus associated interest of $4.1 million. These amounts were recognized as a reduction of cost of goods sold and an increase to other income, respectively, and increased diluted earnings per share by $0.86.

Balance Sheet Highlights

The Company ended the second quarter of 2026 with $1.4 billion in cash and cash equivalents and it had $593.7 million of available capacity under its committed revolving credit facility.

Inventories at the end of the second quarter of 2026 decreased by 1% to $1.7 billion compared to the end of the second quarter of 2025. On a unit basis, inventories decreased 7%.

2026 Outlook

For the third quarter of 2026, the Company expects net revenue to be in the range of $2.290 billion to $2.320 billion, representing a decline of 10% to 11%. Diluted earnings per share are expected to be in the range of $0.93 to $0.98 for the quarter. This assumes a tax rate of approximately 30%.

For 2026, the Company now expects net revenue to be in the range of $10.350 billion to $10.500 billion, representing a decline of 5% to 7%. Diluted earnings per share are now expected to be in the range of $9.48 to $9.73 for the year. This assumes a tax rate of approximately 30%. The 2026 outlook includes $0.86 per share from tariff refunds and associated interest, net of tax recognized in the second quarter of 2026, but does not reflect any further potential tariff refunds.

The outlook does not reflect any future repurchases of the Company’s shares.

The guidance and outlook forward-looking statements made in this press release are based on management’s expectations as of the date of this press release and do not incorporate future unknown impacts, including tariffs and macroeconomic trends. The Company undertakes no duty to update or to continue to provide information with respect to any forward-looking statements or risk factors, whether as a result of new information or future events or circumstances or otherwise. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below.

Conference Call Information

A conference call to discuss second quarter results is scheduled for today, September 3, 2026, at 4:30 p.m. Eastern time. Those interested in participating in the call are invited to dial 1-833-752-3550 or 1-647-846-8290, if calling internationally, approximately 10 minutes prior to the start of the call. A live webcast of the conference call will be available online at: https://corporate.lululemon.com/investors/news-and-events/events-and-presentations. A replay will be made available online approximately two hours following the live call for a period of 30 days.

About lululemon athletica inc.

lululemon athletica inc. (NASDAQ:LULU) is a technical athletic apparel, footwear, and accessories company for yoga, running, training, and most other activities, creating transformational products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all. Setting the bar in innovation of fabrics and functional designs, lululemon works with yogis and athletes in local communities around the world for continuous research and product feedback. For more information, visit lululemon.com.

Non-GAAP Financial Measures

We report certain financial metrics on a constant dollar basis, which is a non-GAAP financial measure.

A constant dollar basis assumes the average foreign currency exchange rates for the period remained constant with the average foreign currency exchange rates for the same period of the prior year. The Company provides constant dollar changes in its results to help investors understand the underlying performance of net revenue excluding the impact of changes in foreign currency exchange rates. Management uses constant currency metrics internally when reviewing and assessing financial performance.

These non-GAAP financial measures are provided in addition to, and not a substitute for, the corresponding financial measures calculated in accordance with GAAP. For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of Non-GAAP Financial Measures” included in the accompanying financial tables, which includes more detail on the GAAP financial measure that is most directly comparable to each non-GAAP financial measure, and the related reconciliations between these financial measures. The Company’s non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures reported by other companies.

Forward-Looking Statements:

This press release includes estimates, projections, statements relating to the Company’s business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “outlook,” “believes,” “intends,” “estimates,” “predicts,” “potential” or the negative of these terms or other comparable terminology. These forward-looking statements also include the Company’s guidance and outlook statements. These statements are based on management’s current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the Company’s ability to maintain its brand value and reputation; its highly competitive market and increasing competition; its ability to anticipate consumer preferences and successfully develop and introduce new, innovative and differentiated products; the acceptability of its products to guests; increasing costs and decreasing selling prices; its ability to accurately forecast guest demand for its products; its ability to expand in light of its limited operating experience and limited brand recognition in new international markets and new product categories; its ability to attract, manage, and retain highly qualified individuals; its ability to manage its growth and the increased complexity of its business effectively; changes in consumer shopping preferences and shifts in distribution channels; its leasing of retail and distribution space; seasonality; changes to U.S. tariff and customs policy, including the elimination of the de minimis exemption; macroeconomic volatility, inflationary pressures, and shifts in consumer sentiment; global political and economic instability, including geopolitical conflicts and political polarization; trade restrictions, tariffs, and customs changes; its ability to comply with trade and other regulations; changes in tax laws, transfer pricing, or unanticipated tax liabilities; fluctuations in foreign currency exchange rates; global or regional public health crises; disruptions of its supply chain; its reliance on a relatively small number of vendors to supply and manufacture a significant portion of its products; suppliers or manufacturers not complying with its Vendor Code of Ethics or applicable laws; fluctuating costs of raw materials and the cost of producing its products; its ability to deliver its products to the market and to meet guest expectations if it has problems with its distribution system; its ability to safeguard against security breaches with respect to its technology systems; its compliance with privacy and data protection laws; any material disruption of its technology systems; its ability to have technology-based systems for its e-commerce business function effectively; imitation by its competitors; its ability to protect its intellectual property rights; conflicting trademarks and patents and the prevention of sale of certain products; actions by stockholders, activists, or consumers; its exposure to various types of litigation; climate change and related pressures; heightened scrutiny and legal risks from competing pressures regarding ESG; and other risks and uncertainties set out in filings made from time to time with the United States Securities and Exchange Commission and available at www.sec.gov, including, without limitation, its most recent reports on Form 10-K and Form 10-Q. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.

lululemon athletica inc. The fiscal year ending January 31, 2027 is referred to as "2026" and the fiscal year ended February 1, 2026 is referred to as "2025". Condensed Consolidated Statements of OperationsUnaudited; Expressed in thousands, except per share amounts Second Quarter First Two Quarters 2026 2025 2026 2025 Net revenue $ 2,415,631 $ 2,525,219 $ 4,887,234 $ 4,895,879 Costs of goods sold 953,753 1,048,017 2,086,538 2,035,551 Gross profit 1,461,878 1,477,202 2,800,696 2,860,328 As a percentage of net revenue 60.5% 58.5% 57.3% 58.4% Selling, general and administrative expenses 1,006,332 951,658 2,066,320 1,894,529 As a percentage of net revenue 41.7% 37.7% 42.3% 38.7% Amortization of intangible assets 1,893 1,730 3,777 3,360 Income from operations 453,653 523,814 730,599 962,439 As a percentage of net revenue 18.8% 20.7% 14.9% 19.7% Other income (expense), net 13,698 9,737 22,829 21,523 Income before income tax expense 467,351 533,551 753,428 983,962 Income tax expense 138,128 162,646 229,157 298,485 Net income $ 329,223 $ 370,905 $ 524,271 $ 685,477 Basic earnings per share $ 2.92 $ 3.10 $ 4.59 $ 5.71 Diluted earnings per share $ 2.92 $ 3.10 $ 4.59 $ 5.70 Basic weighted-average shares outstanding 112,898 119,600 114,156 120,116 Diluted weighted-average shares outstanding 112,919 119,680 114,201 120,262

lululemon athletica inc. Condensed Consolidated Balance SheetsUnaudited; Expressed in thousands August 2, 2026 February 1, 2026 August 3, 2025ASSETS Current assets Cash and cash equivalents $ 1,389,737 $ 1,807,202 $ 1,155,794 Inventories 1,711,450 1,700,753 1,722,570 Prepaid and receivable income taxes 479,948 352,469 323,227 Other current assets 364,452 402,277 327,137 Total current assets 3,945,587 4,262,701 3,528,728 Property and equipment, net 2,046,363 2,033,720 1,917,361 Right-of-use lease assets 1,947,077 1,630,181 1,605,009 Goodwill and intangible assets, net 188,370 191,194 182,215 Deferred income taxes and other non-current assets 357,181 338,947 290,126 Total assets $ 8,484,578 $ 8,456,743 $ 7,523,439 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 346,717 $ 331,421 $ 373,333 Accrued liabilities and other 584,912 662,982 423,933 Accrued compensation and related expenses 122,747 187,887 148,895 Current lease liabilities 366,649 298,724 297,919 Current income taxes payable 67,375 43,948 26,746 Unredeemed gift card liability 277,318 316,632 252,334 Other current liabilities 35,933 45,954 34,186 Total current liabilities 1,801,651 1,887,548 1,557,346 Non-current lease liabilities 1,774,478 1,499,717 1,464,799 Deferred income tax liability 56,987 52,278 62,400 Other non-current liabilities 60,288 55,360 51,615 Stockholders' equity 4,791,174 4,961,840 4,387,279 Total liabilities and stockholders' equity $ 8,484,578 $ 8,456,743 $ 7,523,439

lululemon athletica inc. Condensed Consolidated Statements of Cash FlowsUnaudited; Expressed in thousands First Two Quarters 2026 2025 Cash flows from operating activities Net income $ 524,271 $ 685,477 Adjustments to reconcile net income to net cash provided by operating activities 65,007 (475,755 ) Net cash provided by operating activities 589,278 209,722 Net cash used in investing activities (281,802 ) (319,960 ) Net cash used in financing activities (712,225 ) (744,823 ) Effect of foreign currency exchange rate changes on cash and cash equivalents (12,716 ) 26,519 Decrease in cash and cash equivalents (417,465 ) (828,542 ) Cash and cash equivalents, beginning of period 1,807,202 1,984,336 Cash and cash equivalents, end of period $ 1,389,737 $ 1,155,794

lululemon athletica inc. Reconciliation of Non-GAAP Financial MeasuresUnaudited Constant dollar changes The below changes show the change compared to the corresponding period in the prior year. Second Quarter 2026Net Revenue Change Foreign exchange Change in constant dollars United States (8 )% — % (8 )% Canada (11 ) 2 (9 ) Americas (8 ) — (8 ) China Mainland 4 (6 ) (2 ) Rest of World 5 1 6 Total international 4 (2 ) 2 Total (4 )% (1 )% (5 )%

Second Quarter 2026Comparable Sales(1) Change Foreign exchange Change in constant dollars Americas (12 )% — % (12 )% China Mainland (2 ) (6 ) (8 ) Rest of World (4 ) 1 (3 ) Total international (3 ) (3 ) (6 ) Total (9 )% (1 )% (10 )%

__________(1) Comparable sales includes comparable company-operated store and e-commerce net revenue. Comparable company-operated stores have been open for at least 12 full fiscal months, or open for at least 12 full fiscal months after being significantly expanded. Comparable company-operated stores exclude stores which have been temporarily relocated for renovations or have been temporarily closed.

lululemon athletica inc. Company-operated Store Count and Square Footage(1)Square footage expressed in thousands Number of Stores Open at the Beginning of the Quarter Number of Stores Opened During the Quarter Number of Stores Closed During the Quarter Number of Stores Open at the End of the Quarter 3rd Quarter 2025 784 14 2 796 4th Quarter 2025 796 18 3 811 1st Quarter 2026 811 11 6 816 2nd Quarter 2026 816 11 2 825

Total Gross Square Feet at the Beginning of the Quarter Gross Square Feet Added During the Quarter(2) Gross Square Feet Lost During the Quarter(2) Total Gross Square Feet at the End of the Quarter 3rd Quarter 2025 3,511 128 9 3,630 4th Quarter 2025 3,630 116 10 3,736 1st Quarter 2026 3,736 66 14 3,788 2nd Quarter 2026 3,788 100 8 3,880

__________(1) Company-operated store count and square footage summary excludes retail locations operated by third parties under license and supply arrangements. (2) Gross square feet added/lost during the quarter includes net square foot additions for company-operated stores which have been renovated or relocated in the quarter.

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Investor Contacts:

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