JPMorgan Lowers Lululemon Stock Price Target by 38% Following Disappointing Q2 Results
JPMorgan analyst Matthew Boss reduced his price target for Lululemon (LULU) stock to $95 from $154, a drop of nearly 38%, following the company's weak second-quarter results and management’s revised outlook. The firm maintained its “Neutral” rating despite concerns over declining sales in key markets like North America and China mainland. Lululemon reported total net revenue falling 4% to $2.4 billion for Q2, with comparable sales down sharply across both regions. The company's third-quarter guidance is significantly below Wall Street expectations, particularly on earnings per share, which are projected at just $0.93–$0.98 compared to $2.59 a year ago. JPMorgan highlighted that Lululemon’s operating margin for Q3 is expected to fall sharply from 17% last year to around 6.5%. Management cited issues including negative online sentiment in China and weak product reception as contributing factors. Lululemon has initiated strategic changes, such as focusing on better-performing styles, reducing SKUs, and increasing marketing efforts for the back half of the year. CFO Meghan Frank acknowledged traffic pressures but noted that conversion rates have not worsened further.
Topics: Earnings Results JPMorgan Lululemon Stock Price Target