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Lululemon’s China Surge: Why 30% Growth Is Not Enough To Calm The Market!

Lululemon reported first quarter 2026 total net revenue of $2.5 billion, representing a 4% increase on a reported basis but a 2% decrease on a constant currency basis. Comparable sales declined 2%, driven largely by a 6% decrease in North America where revenue fell 3% versus the prior year. In contrast, China Mainland revenue rose 30% (23% constant currency) with comparable sales growth of 13%, and the Rest of World segment grew revenues by 13% (9% constant currency) with a modest 1% comparable sales increase. The company ended the quarter with 816 stores globally, adding five net new stores and completing six optimizations; e-commerce sales rose 4%, now representing 40% of total revenue. Gross margin contracted by 410 basis points to 54.2%, primarily due to a 330 basis point decline in product margin.