Lululemon’s shares fall despite upbeat Q4 results

Today’s headlines

What’s happening: Shares of Lululemon Athletica edged lower in extended trading hours on Tuesday after the company released its fourth-quarter results.

What happened: The athletic apparel maker reported better-than-expected sales and earnings for the latest quarter.

Lululemon issued weak revenue and profit guidance for 2026 and appointed a former Levi Strauss CEO to ‌the board.

How were the results: The Vancouver, Canada-based company reported low single-digit sales growth for the fourth quarter.

• Revenue rose to $3.64 billion, from $3.61 billion in the year-ago period, and topped consensus estimates of $3.59 billion.
• GAAP earnings came in at $5.01 per share, beating Wall Street expectations of $4.79 per share.

Why it matters: Lululemon has been struggling due to softness in consumer spending and tough competition from rivals like Nike and Alo Yoga.

The company is looking for a permanent CEO following the departure of Calvin McDonald in January and is also facing a proxy fight by its founder Chip Wilson. The company named former Levi Strauss chief Chip Bergh to its board. The founder also named three independent directors ‌to ⁠the board and called for board elections.

“As we begin our new fiscal year, we are focused on executing on our action plan, offering new and differentiated products to our guests, and elevating their experiences with Lululemon,” CFO Meghan Frank said.

Lululemon guided to fiscal 2026 GAAP earnings of $12.10-$12.30 per share, below market estimates of $12.67 per share. The company projected revenue of $11.35-$11.50 billion, falling short of estimates of $11.53 billion.

Due to its dependence on China for sourcing and manufacturing, Lululemon said its recent outlook includes an impact of around $380 million from gross US import tariff, compared to $275 million in the previous year.

How shares responded: Lululemon’s shares fell 1.7% to $156.52 in after-hours trading following the release of quarterly results on Tuesday. The stock has lost more than 24% year to date.

What to watch: Investors will keep an eye on overall consumer spending and competition from rivals, which are expected to significantly impact the company’s results ahead.

The markets today

The Australian dollar in focus today ahead of the jobs report

Context: The AUD/USD forex pair slipped this morning as investors digested the latest interest rate decision by the Reserve Bank of Australia.

Details: The Australian dollar is nearing multi-year highs amid hawkish comments from the Reserve Bank of Australia. The RBA hiked the cash rate by 25bps to 4.1%, recording a second straight month of hike.

The central bank’s governor Michele Bullock warned of persistent inflation risks amid rising energy costs due to escalating concerns in the Middle East. Market speculations went higher of another rate hike in May.

Data released this morning showed that the Westpac–Melbourne Institute leading economic index fell by 0.1% in February compared to a flat reading in January.

Meanwhile, the ongoing conflict in the Middle East remained in focus, with Iran increasing attacks on energy infrastructures in the region.

Strength in the US dollar weighed on the AUD/USD pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged higher to 99.59 this morning.

The AUD/USD forex pair gained 0.1% to 0.7109 this morning, while the S&P/ASX 200 rose 0.2% to trade at 8,631.80.

What to watch: Investors await the release of jobs data (0430 UAE Time) from Australia on Thursday. Employment in Australia, which rose by 17,800 to a new high of 14.70 million in January, is expected to grow by 20,300 in February. Analysts expect Australia’s unemployment rate to remain at 4.1% in January, unchanged from the previous month.

Other Markets: US trading indices closed higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.10%, 0.25% and 0.47%, respectively.

The news shaping the markets

Ukraine’s President Volodymyr Zelenskyy said 201 anti-drone experts from the country are in the Middle East to provide support to the region against Iranian drones. The news sent the USD/RUB pair higher in forex trading this morning.

Japan’s trade surplus fell to ¥57.3 billion in February from ¥559.2 billion in the year-ago period. However, the latest reading topping market estimates of ¥483.2 billion exerted pressure on the USD/JPY forex pair.

South Korea’s unemployment rate fell to 2.9% in February from 3% in the previous month. The jobless rate falling to its lowest level in three months sent the USD/KRW pair lower in forex trading this morning.

New Zealand’s current account deficit shrank to NZ$5.98 billion in the fourth quarter from NZ$8.36 billion in the previous quarter, lending support to the NZD/USD forex pair.

Eurozone’s ZEW indicator of economic sentiment dipped by 47.9 points from the previous month to a reading of -8.5 in March. The region’s investor morale falling to the lowest level in 11 months sent the EUR/USD pair lower in forex trading this morning.

What else to watch today

South Africa’s inflation rate (1200 UAE Time) and retail sales (1500 UAE Time), Eurozone’s inflation rate (1400 UAE Time), Turkey’s MPC meeting summary (1500 UAE Time), US MBA mortgage applications (1530 UAE Time), PPI (1630 UAE Time), factory orders (1800 UAE Time), EIA crude oil stocks change (1830 UAE Time), Fed interest rate decision (2200 UAE Time) and Fed press conference (2230 UAE Time), Canada’s foreign securities purchases (1630 UAE Time) and BoC interest rate decision (1745 UAE Time), Brazil’s business confidence (1800 UAE Time), Russia’s PPI (2000 UAE Time), as well as Argentina’s unemployment rate (2300 UAE Time).