lululemon athletica inc. (LULU): a likely value trap?

Avoid — the cheap P/E reflects a business still actively shrinking, with guidance cut twice this year and no bottom in sight.

⚠ TRAP Fundamentals58/100

Down 80% from its all-time high of $511.29 — now $103.19

Why LULU dropped

LULU just cut its full-year guidance for the second time in fiscal 2026 after a Q2 report showing comparable sales down 9% (Americas -12%), sending shares down ~18-20%; this compounds a two-year decline driven by tariffs, weak U.S. store traffic, negative social media buzz hurting the brand, and a leadership vacuum (former CEO departed in January, new CEO just starting).

Fwd P/E 11.1Op margin 13.2%Rev growth -4.3%Debt/equity 44.7%Analyst upside 6.0%

How this scored 58/100

✅ Passes all 4 hard checks — profitable, cash-generative, and financially survivable.

✅ Makes money Net profit margin 12.8%

✅ Generates cash Free cash flow $1.1B

✅ Not drowning in debt Debt/equity 44.7% (limit 200%)

✅ Can pay its bills Current ratio 2.2 (needs 1+)

Bar length shows how much each metric is worth — a 10-point metric is twice as wide as a 5-point one. Hover any row for what it means.

Profitability Does it actually make money? 18/25

Operating margin 13.2% 5/9

Net profit margin 12.8% 5/8

Return on equity 30.9% 8/8

Growth Is it getting bigger, or dying? 1/25

Revenue growth -4.3% 0/9

Earnings growth -5.9% 1/8

Expected profit change -24.6% 0/8

Value Is it cheap right now? 17/25

Forward P/E 11.1 9/10

PEG ratio 0.8 7/8

Analyst target upside 6.0% 1/7

Balance sheet Will it survive? 22/25

Debt / equity 44.7% 9/10

Current ratio 2.2 6/8

Free cash flow $1.1B 7/7

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Analysis generated by SmartStonks's AI from public fundamentals and news, first flagged 2026-09-09. Research only — not financial advice.