Textiles, Apparel & Luxury Goods
Price
$118.43
+1.74%Market Cap
$14.05B
Day High
$119.83
Day Low
$116.39
Lululemon's Q2 FY2026 results showed modest revenue growth of 4.3% to $2.47B, but profitability deteriorated sharply with gross margin contracting 417 bps to 54.2% and net income falling 38.0% to $195M due to rising costs.
Key risk: Significant Margin Compression Risk
Gross margin declined approximately 417 basis points YoY to 54.2%, driven by a 14.7% surge in cost of revenue that far outpaced revenue growth of 4.3%. If cost pressures persist — whether from supply chain, raw materials, or tariffs — profitability could deteriorate further. Operating margin has already fallen from 18.5% to 11.2% in a single year.
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