Lululemon Sees 13.8% Expected Post-Earnings Swing as Stock Tracks 36% YTD Drop
LULU•Lululemon is forecast to earn $1.67 per share on $2.43 billion in fiscal Q2 revenue, with options pricing a 13.8% post-earnings swing—well above its eight-quarter average of 10.9%. Shares have slumped 36% YTD to seven-year lows, while short interest has climbed 40% to 6.02% of the float.
1. Q2 Earnings and Revenue Outlook
Lululemon is set to report fiscal Q2 earnings of $1.67 per share on $2.43 billion in revenue. This follows modest Q1 growth projections of 0.8% revenue increase and a 1% comparable sales decline driven by softer North American demand.
2. Elevated Volatility Expectations
Options markets imply a 13.8% price swing post-earnings, compared with an average 10.9% move over the past eight quarters. The stock’s Schaeffer’s Volatility Scorecard stands at 95 out of 100, signaling historically higher-than-expected volatility.
3. Stock Performance Pressure
Shares have dropped 36% year to date, reaching seven-year lows on May 20, though they have posted six wins in the last seven sessions. Short interest now represents 6.02% of the float, up nearly 40% over the past month, suggesting potential squeeze dynamics.
4. Leadership Changes and Recovery Outlook
The company has paused its public feud with founder Chip Wilson ahead of a new CEO's September start. Underlying traffic and conversion weakness persist, with a meaningful turnaround not expected until 2027.
