Lululemon slides on weak guidance despite earnings beat

Lululemon beat Q2 on adjusted EPS ($2.92, aided by $0.86 tariff refunds) but revenue fell 4% to $2.40B, missing estimates; comparable sales dropped 9% (Americas -12%, international -3%). For Q3, management guides revenue of $2.29B–$2.32B and EPS of $0.93–$0.98, well below consensus, and full-year 2026 revenue of $10.35B–$10.50B with EPS of $9.48–$9.73, also below expectations. Gross margin rose to 60.5% due to tariff refunds, while operating margin declined to 18.8%. The weak guidance sparked roughly a 15% drop in LULU shares.