Lululemon’s US Sales Struggles Are Likely To Extend Into 2026 Despite CEO Reset, Warns UBS

• UBS does not expect Lululemon's Americas sales growth to turn sustainably positive in 2026.
• It said LULU will have to invest at least a year of time and effort to return its U.S. business to sustainable sales growth.
• The firm kept a “Neutral” rating and $206 price target on the shares.

A fresh annual global athletic wear survey from UBS is flashing caution on Lululemon’s U.S. outlook. An analyst at the firm said that Lululemon's Americas sales growth rate may not turn sustainably positive in 2026, despite leadership changes.

The survey indicated that U.S. trends likely "stay tough,” as per TheFly. The firm kept a “Neutral” rating and $206 price target on the shares.

The firm, in a note to investors, said that no matter who the new CEO is, Lululemon will need at least a year of time and effort to return its U.S. business to sustainable sales growth. 

Lululemon’s U.S. sales have struggled amid rising competition and weak consumer demand due to macroeconomic uncertainties stemming from higher inflation and tariffs. In its recently announced third-quarter results, its net revenue in the U.S. region fell 2% to $1.7 billion.

In September, Lululemon warned that U.S. tariffs on Vietnam and China, and the removal of the de minimis rule, would hurt its 2025 gross profit by $240 million, with impacts possibly reaching $320 million in 2026. 

Boardroom Uncertainty

Lululemon founder Chip Wilson has launched a proxy fight by nominating three independent directors in an effort to remake the company’s board as the athletic-apparel retailer searches for a new chief executive.

He said that shareholders have no confidence that the existing board can select and support the next CEO without onboarding members with stronger product experience.

He further submitted a non-binding proposal calling for the board to immediately declassify, so that all directors are elected annually by shareholders.

Earlier this month, Lululemon said its CEO, Calvin McDonald, will leave the company. The firm named its finance chief, Meghan Frank, and chief commercial officer, André Maestrini, as co-interim CEOs. 

How Did Stocktwits’ Users React?

Retail sentiment around LULU trended in ‘bearish’ territory amid ‘extremely low’ message volume. 

Shares of Lululemon have fallen 43% so far in 2025. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.
 

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