Lululemon shares rose 0.4% in premarket trading on Thursday as investors waited for first-quarter results, even after Evercore cut its price target on the stock to $130 from $175. The firm kept an In Line rating, but said the company’s attractive valuation was being outweighed by the risk of a big reset to fiscal 2026 expectations.
The move came just ahead of a report Wall Street expects will show revenue of $2.37 billion and earnings of $2.60 a share, with sales slightly below a year earlier and profit essentially flat. For a stock that had already fallen 4% so far that week, the setup left little room for disappointment and put the lulu stock debate squarely on whether management can show that the turnaround is taking hold.
Meghan Frank said in March that Lululemon was in the middle of restoring the full-price health of the brand, and the company has pointed to more new products, fewer markdowns and tighter inventory as the path back. It has also said positive full-price sales growth in North America should begin in the second quarter and continue in the second half, while new items are expected to make up 35% of the assortment in 2026, up from 23% in 2025.
That plan matters because the pressure is not just on the current quarter. Evercore’s warning centers on what comes after it, with the possibility that a weak read on demand could force investors to rethink fiscal 2026 even if the current valuation still looks appealing. Lululemon has said China Mainland revenue should grow 20% this year and the rest of its international business should rise at a mid-teens rate, while also saying it saw strength in China and South Korea.
The company’s recent agreement with founder Chip Wilson added another layer of focus before the results, with Lululemon set to appoint two of his nominees to the board and add a third director by Oct. 1 after Wilson agreed to stay publicly quiet about the company for 18 months. Heidi O'Neill is also set to arrive as CEO in September. For now, Thursday’s earnings release is the next test of whether the brand’s recovery story can survive contact with the numbers.
