People walk past a Lululemon store, a Canadian brand, in
People walk past a Lululemon store, a Canadian brand. Adek BERRY/Getty Images

Lululemon reports fiscal second-quarter results after Wall Street closes Thursday, Sept. 3, with shares trading roughly 49% below their all-time high and management already guiding for a sharp profit drop — even as the company's China business keeps expanding at a pace the rest of the group can't match.

Shares were trading near $117 this week, about 49% below their all-time high, according to Motley Fool's Aug. 26 analysis. Lululemon has guided for second-quarter revenue to fall 2% to 3% year over year, with net income plunging 42% to 43%, largely on continued weakness in North America, its largest market.

China Mainland moved in the opposite direction in the quarter ended May 3: revenue there rose 30% year over year, or 23% in constant currency, lifting the region to 19% of total company revenue from 16% a year earlier, according to Lululemon's first-quarter results reported by CNBC. For the full 2025 fiscal year, China revenue grew 29%, and management has guided for roughly 20% China growth in fiscal 2026 — even as total company revenue is guided flat to down 1%, per China Daily's reporting on Lululemon's fourth-quarter results.

North America has now posted five straight quarters of falling comparable sales, which interim leadership has attributed to negative brand commentary and underwhelming product launches. Former Nike executive Heidi O'Neill takes over as chief executive on Sept. 8, days after the earnings report.

The split puts Lululemon in the same arena as several Hong Kong-listed sportswear names chasing China's premium athleisure spending: Anta Sports (2020.HK), Li Ning (2331.HK), Bosideng (3998.HK) and Xtep International (1368.HK) all compete for the same higher-income, fitness-focused shoppers Lululemon is courting through store expansion and localized marketing in cities like Shanghai and Beijing.

Thursday's report will show whether China can keep growing at that pace while North America keeps sliding, and how much detail O'Neill's incoming team offers on plans to stabilize the U.S. business. Also due for an update: Lululemon's China store count, which stood above 170 at the end of fiscal 2025.