After the Quarter: Notes on Lululemon, and Salesforce
Salesforce and Lululemon Quarterly Earnings Review: What Investors Should Watch Next
We have just finished, at least for me, a very busy earnings period.
Over the last few weeks, companies from Gartner and HubSpot to Lululemon have reported their results. I have been busy going through the earnings calls, quarterly numbers, and also listening to management teams at post-earnings conferences, including Baird, Bank of America and Jefferies software conferences.
I like following these moments closely because earnings alone never tell the full story. The numbers matter, of course, but the way management explains the quarter, answers questions, and frames the future often gives you a better sense of where the business is really heading.
If you read my December and January watchlists, you will know some of the companies I have been watching closely. Some of them are also in my portfolio. In this series, I want to go through a few recent earnings and share my thoughts on Salesforce and Lululemon.
Before going into the companies, I want to start with the bigger question:
Is the market offering a bargain, or is it correctly lowering the value of future cash flows?
Some companies look cheap in absolute terms. You can look at free cash flow, market cap and earnings power and say the valuation is not demanding. But if the terminal value of the business has changed, cheap on today’s numbers may not be enough.
Lululemon Q1 FY2026
The stock traded above $500 per share near its 2023 peak. After the latest earnings reaction, it was close to the $110.
The Americas business is weak. There has been a CEO transition. The founder has been publicly critical. Competition is also much stronger than before, and in some cases competitors are getting closer to Lululemon’s quality.
Product newness has not been managed well enough, and some products clearly did not get the customer response management would have wanted. Tariffs are hurting margins, and the broader apparel industry is not easy at the moment either.
So the question is simple: is Lululemon dealing with a temporary product and traffic problem, or is the brand losing relevance in its most important market?
What the quarter showed
Lululemon grew Q1 revenue 4% to $2.472 billion, or 2% in constant currency. On the surface, that does not look terrible.
Americas revenue fell 3%, or 4% in constant currency. Comparable sales in the Americas fell 5%, or 6% in constant currency.
Disclaimer: This article is for informational purposes only. It is not financial advice. I am not a financial advisor. I may buy or sell these stocks at any time. You must do your own research before investing
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