lululemon athletica enters the final weeks before its September 3 earnings report with the Street turning measurably more negative — and short sellers following closely behind.
The analyst story has shifted quickly and in one direction. Morgan Stanley reinstated coverage on July 6 with an Underweight rating and a $93 target, one of the more bearish stances on the Street. Truist followed on July 16, downgrading from Hold to Sell and cutting its target from $115 to $94. Wells Fargo trimmed its target to $105 earlier this week while staying at Equal-Weight. Those are three separate actions from three firms in under three weeks, all pointing the same way. The consensus mean target of $127.73 still sits well above Friday's close of $114.28, but the direction of travel in recent revisions runs sharply counter to that average — which reflects targets set earlier, before this month's cuts. Bears argue the stock faces a leadership transition, fading social-media presence, and competitive pressure that could push multiples toward the $70-80 range. The bull case is harder to find in the recent analyst tape.
Short positioning reinforces the cautious read from the Street. Short interest has risen 40% over the past month to 9.0% of the free float, around 10.2 million shares as of July 23. The build has been steady rather than explosive — shares short have held above 9.9 million for most of the past two weeks after a step-change jump on July 9 when the count rose by more than 1.3 million shares in a single session. The ORTEX short score ticked up to 51.8, its highest reading in the recent window. That said, the lending market is not under pressure. Availability is running at 559% of short interest — deep in "plenty of supply" territory — and the cost to borrow, while up 30% on the week, is still only 0.43%. Bears have added conviction, but they are not being forced to cover.
Options traders have also turned incrementally more defensive. The put/call ratio at 0.73 is running above its 20-day average of 0.69 by roughly 1.5 standard deviations — not an extreme reading, but a consistent drift toward caution over the past week. The PCR peaked closer to 0.75 earlier in the week before easing slightly on Friday, suggesting the defensive hedging impulse is present without being panicked.
Valuation gives bears additional ammunition. The trailing P/E is near 9.9x and the EV/EBITDA has compressed to 5.4x, both down over the past week. EPS momentum factor scores rank in the 12th to 17th percentile, meaning forward estimate revisions have been broadly negative relative to the wider universe. The stock is up 5% over the past month and recovered 3.3% on Friday, but it remains down on the week by 1.8% — a recovery that looks fragile rather than conviction-driven. Close peer ONON fell 3.7% on the week while VFC held roughly flat, suggesting the pressure on LULU is more name-specific than sector-wide.
The next concrete marker is the September 3 earnings date. The most recent prior print — June 4 — saw the stock fall 9.4% in a single session and end the five-day window down 3.3%. The one before that, on June 25, produced a 4% one-day gain. The reaction history is volatile in both directions, which makes the current positioning — elevated short interest, a defensive options skew, and a freshly negative analyst consensus — the setup worth watching as that date approaches.
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