Guggenheim reiterates Lululemon stock rating amid sales concerns

Guggenheim has preserved its Neutral rating on Lululemon Athletica Inc. (NASDAQ:LULU) despite sales challenges. Analyst Simon Siegel reported a decline in U.S. sales by 8% and a reduction in guidance for the third-quarter and full-year earnings per share. The firm has been cautious due to Lululemon's U.S. brand appearing to exceed saturation levels it originally set in March.

Guggenheim has revised its fiscal 2026 and 2027 estimates to be slightly above the new guidance and has also reduced its projections. The company’s shares have fallen 41.4% year-to-date, trading at a low P/E ratio of 9.81. Despite this, InvestingPro analysis deems the stock undervalued and highlights management's share repurchases as a positive.

Lululemon reported a 4% revenue decline in the second quarter, slightly worse than initially expected, but earnings per share beat forecasts. Other analysts have adjusted their opinions on Lululemon, with some lowering their ratings while others maintain neutral or hold positions.