Lululemon Athletica faces analyst downgrades amid revenue and margin declines

Lululemon Athletica is facing downward pressure from analysts due to declining revenue and weakening margins. Zacks Research has issued a “Strong Sell” rating for the apparel retailer, forecasting Q3 2027 earnings of $0.96 per share.

Market performance has been impacted by a reported 40% selloff in the stock price. Recent financial data indicates a 5% year-over-year revenue decline in Q2 2026, with the core Americas segment dropping 8% and the company’s key leggings line declining by 20%. Analysts note that discounting efforts have failed to stimulate sales, and underlying gross and operating margins have deteriorated.

Other financial institutions have also adjusted their outlooks. Truist Financial reiterated a “sell” rating and lowered its price target to $82.00, while Wells Fargo & Company also reduced its target price for the company.