Lululemon Q4 Beat Offset by 8% EPS Guidance Cut and 54.9% Margin
Lululemon delivered a Q4 earnings beat with Q4 EPS above estimates while Americas revenue fell 4%. The company guided FY2026 EPS to $12.10–$12.30, an 8% decline from prior year, and gross margin compressed by 550 basis points to 54.9%, prompting a 2% share pullback.
1. Q4 Earnings Beat
Lululemon beat Q4 EPS estimates, driven by robust direct-to-consumer and international sales, although growth in its Americas segment lagged.
2. Americas Revenue Decline and Margin Drop
Revenue in the Americas fell 4% year-over-year in Q4, while gross margin compressed by 550 basis points to 54.9%, reflecting higher promotion costs and input expenses.
3. FY2026 Guidance and Investor Reaction
Management set FY2026 EPS guidance at $12.10–$12.30, an 8% decline from the prior year, triggering a roughly 2% drop in share price as investors weighed lower profitability outlook.