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Lululemon sales fall 12%, margins shrink; stock seen undervalued with 15% upside potential

Analyst Insights
06 Oct 2026
Seeking Alpha
View Source
Bullish
Lululemon sales fall 12%, margins shrink; stock seen undervalued with 15% upside potential

Lululemon Athletica reported a 12% drop in comparable North American sales and a decline in operating margin from 21% to 12%. The company faces challenges as core product sales decline and excess store costs weigh on profitability. New CEO Heidi O'Neill aims to address these issues, with analysts suggesting a potential margin recovery to 16-18%. Despite current struggles, the stock is considered undervalued at $94, with a target price of $137 per share, implying a 15% annualized upside if margins improve.

Lululemon Athletica trades at USD 92.87 on Pluang as of Oct 06, 2026 21:12 WIB, slightly down by 0.29% in the last day. The stock's market cap stands at $10.31 billion with a high volume of over 7 million shares traded, reflecting active investor interest despite the recent sales and margin challenges reported. The platform shows a strong sell sentiment with 85% of orders to sell, indicating cautious positioning among Pluang users.

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