Is Lululemon’s Next Big Thing Already Here

Lululemon Athletica (LULU) built its brand on leggings, but those core products are losing momentum. Executives reported that legging sales fell about 20% in the quarter ended August 2, 2026. During the September 3 earnings call, management cited a greater-than-expected slowdown in core categories such as leggings, while newer looser-fitting styles showed early traction. So what are Lululemon's shoppers buying instead, and is it enough to make up for leggings?

Lululemon's Shoppers Are Moving Into Looser Styles

Shoppers are gravitating toward looser silhouettes that do not hug the body, a category management calls away-from-body styles. This shift has been building over time, and leggings slowed more than executives expected during the quarter, while the newer styles drew a positive response. The company highlighted specific new styles it is happy with, including the Groove Wide-Leg and the Align Foldover Jogger.

Lululemon is set up to follow that demand. Management said the company is chasing about 20% more volume in fiscal 2026 than in fiscal 2025. Chasing is its word for reordering styles once they prove they sell. Shorter reorder times let Lululemon react to what shoppers buy and get back into strong-selling styles faster, management said, enabling the retailer to buy more of whatever shoppers pick.

Questions like this one test every retirement plan. If your advisor recently retired, it is a good moment for a free second opinion from our partner firm.

Lululemon's New Styles Are Still Small Against Its Sales

These new styles are not yet big enough to lift the entire company. Lululemon posted revenue of $2.42 billion in the quarter, down 4.3% from a year earlier. Sales of women's products fell 4% during the same period. Looking ahead, management expects fiscal 2026 revenue of $10.35 billion to $10.5 billion, a decline of 5% to 7% from 2025.

Lululemon recorded $11.1 billion in sales over its last twelve months, and the newer styles have not yet stopped its revenue from falling. The away-from-body items must make up for falling leggings sales before they can add growth on top.

Investors are paying much less for Lululemon's earnings compared to the wider market. On October 16, 2026, Lululemon stock closed 53% below where it ended 2025. The shares trade at 7.7 times earnings, against 22.9 for the S&P 500.

What Does Lululemon Still Have To Prove?

Lululemon still has to prove that its new products can win shoppers back.

Management took a cautious view of the second half. Executives noted that the third quarter got off to a slow start, and the company had expected a better response than it was seeing as the period began. On October 7, Lululemon named a former Nike vice president its chief product officer, as the company overhauls its leadership under a new CEO.

Management expects revenue of $2.29 billion to $2.32 billion for the third quarter of fiscal 2026, down 10% to 11%. Revenue against that guidance will be the number to watch when Lululemon next reports earnings, expected on or around December 9, 2026.

Your Advisor Retired? Get A Second Opinion Before You Settle

Lululemon Athletica holders are waiting for something new to move the stock. When the advisor who built your plan moves on, it is a natural moment to ask whether the plan still fits the life you have now. Glenn Caldicott, CIO of our Boston-based partner firm Empirical Asset Management, an SEC-registered investment adviser, offers a free review of your holdings, fees and income plan.

Get A Free Second Opinion