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

Key Points

• Lululemon faces significant headwinds, including declining comparable sales, slowing China growth, and a leadership transition, reflected in mostly Hold or Sell analyst ratings.
• On Holding suffered its worst trading day after an earnings miss, but strong direct-to-consumer growth and expanding margins suggest underlying business strength.
• Amer Sports reported 32% revenue growth and raised full-year guidance, positioning it as a stronger alternative within the athletic apparel industry.

Looking at opinions across Wall Street of 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 to 27 total Hold or Sell ratings, but recent weeks have brought an onslaught of lowered price targets and reiterated negative views of the stock. Investors subscribing to these same beliefs might see headwinds like slowing growth in Asia, a major leadership change with a new CEO in September, and poor visibility in the company's attempts at making a turnaround.

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

Lululemon’s Turnaround Has Real Problems

Despite efforts to overcome a number of significant challenges, lululemon has so far struggled to do so. Q2 2026 revenue fell on a year-over-year (YOY) basis, and worse still was the fact that comparable sales were down 10% over the same period. The company's business in China, long seen as a bright spot and potential source of momentum, seemed to falter; China mainland sales climbed by only 4% YOY, which actually reflects a decline of 2% in constant currency.

Add to the mix lowered guidance, inconsistent demand, a 20% YOY decline in leggings sales and a drop in accessories sales that was only slightly better, and some costly PR missteps amid a major leadership transition, and the company's pessimistic analyst rating appears fairly well-deserved.

With a new CEO arriving in September, lululemon faces execution risk with an incoming leader forced to deal with a significantly challenging environment as the company attempts a brand repair.

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 going public five years ago, with shares falling by more than 20% in a single trading session.

The plummeting share price coincided with On's recent earnings report, which did see both top- and bottom-line misses relative to analyst predictions of performance. Still, despite these headline disappointments, there are some strong underlying business metrics that 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 by more than 34% at 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, and newer growth areas like apparel are also seeing momentum. This is despite the fact that On's wholesale growth appeared sluggish. The company deliberately limited sell-in for the American market due to certain key considerations about the environment itself and as a way to maintain inventory discipline and build the brand's premium positioning.

Looking beyond the banner performance figures to these details, it may be 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 argument for its fundamentals of the three firms. With adjusted earnings of 22 cents per share in Q2 2026 and $1.6 billion in revenue—up by an impressive 32% YOY, Amer is impressive across its business: all segments and regions delivered 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 boosted full-year guidance and now anticipates 24% YOY improvement in revenue. New store locations around the world and particularly in China suggest that lululemon's regional struggles may be unique to that company in particular.

To be sure, Amer still faces some challenges, including tariff concerns, the high cost of freight, and the potential for geopolitical tensions to continue to rise. Still, the company's cheery analyst ratings present it as an under-appreciated alternative to a large firm in the industry that has been struggling.