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Lululemon’s Problems May Not Be a Warning for Every Athleticwear Stock

Authored by Nathan Reiff. Article Published: 9/9/2026.

Looking at opinions across Wall Street on lululemon athletica inc. (NASDAQ: LULU), it seems clear that the stock is in trouble. Not only do shares have just a single Buy rating compared with 27 total Hold or Sell ratings, but recent weeks have also brought an onslaught of lowered price targets and reiterated negative views of the stock. Investors who share these beliefs might point to headwinds such as slowing growth in Asia, a major leadership change with a new CEO arriving in September, and poor visibility into the company's turnaround efforts.

Expanding the view to encompass a broader cross-section of the premium athletic and apparel brands space, however, may make it clearer that companies operating in the same consumer environment can nonetheless produce entirely different results. Investors looking for industry-wide issues might be inclined to view lululemon's company-specific problems as indicative of broader concerns, whether or not those concerns actually exist.

Lululemon’s Turnaround Has Real Problems

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Despite efforts to overcome a number of significant challenges, lululemon has so far struggled to do so. Q2 2026 revenue fell year over year (YOY), and worse still, comparable sales declined 10% over the same period. The company's business in China, long viewed as a bright spot and potential source of momentum, also seemed to falter; mainland China sales climbed just 4% YOY, which actually represents a 2% decline in constant currency.

Add to that lowered guidance, inconsistent demand, a 20% YOY decline in leggings sales, and a slightly smaller decline in accessories sales. Costly public relations missteps amid a major leadership transition further compound the challenges, making the company's pessimistic analyst rating appear fairly well-deserved.

With a new CEO arriving in September, lululemon faces execution risk as its incoming leader confronts a significantly challenging environment while attempting to repair the brand.

On Holding Seems to Be in a Similar Boat, But May Present More Reasons for Optimism

Looking to lululemon's rivals, high-end athletic footwear brand On Holding AG (NYSE: ONON) would seem to be in a similar situation. Aug. 11, 2026, was the worst trading day in the company's history since it went public five years ago, with shares falling more than 20% in a single trading session.

The plummeting share price coincided with On's recent earnings report, which included both top- and bottom-line misses relative to analysts' performance estimates. Still, despite these headline disappointments, some strong underlying business metrics may support future growth in a way that distinguishes the company from lululemon.

For one thing, On's direct-to-consumer (DTC) business is thriving. This metric grew more than 34% in constant currency, reaching nearly 46% of total sales. While lululemon's Asian business is struggling, On's is growing: the Asia-Pacific region contributed more than 20% of worldwide sales for the quarter.

On's gross margin and adjusted EBITDA margin are both expanding, while newer growth areas such as apparel are also gaining momentum. This is despite sluggish wholesale growth. The company deliberately limited sell-in for the American market because of certain considerations about the environment and to maintain inventory discipline while building the brand's premium positioning.

Looking beyond the headline performance figures to these details, it may become clearer why insiders are apparently favoring ONON shares again and why the company's analyst ratings diverge so dramatically from LULU's bearish views.

Amer Sports May Be in a Different Category Altogether

If LULU is in a precarious position and ONON has some positive attributes hiding beneath the surface, Amer Sports (NYSE: AS) may have the strongest fundamental argument of the three firms. With adjusted earnings of 22 cents per share in Q2 2026 and $1.6 billion in revenue—up an impressive 32% YOY—Amer is performing well across its business, with all segments and regions delivering excellent growth. DTC sales growth of 40% YOY was even stronger than On's in this area.

Amer's key brands, including Arc'teryx and Wilson Tennis 360, continue to see strong momentum despite inflationary pressures. What's more, management raised its full-year guidance and now anticipates a 24% YOY improvement in revenue. New store locations around the world, particularly in China, suggest that lululemon's regional struggles may be unique to that company.

To be sure, Amer still faces some challenges, including tariff concerns, high freight costs, and the potential for geopolitical tensions to continue rising. Still, the company's cheery analyst ratings present it as an underappreciated alternative to a large industry player that has been struggling.