The company's fiscal second-quarter and full-year guidance missed expectations
Lululemon Athletica Inc (NASDAQ:LULU) stock is down 19.7% to trade at $265.71, after the athleisure company's fiscal second-quarter and full-year guidance missed expectations, with tariff pressures the culprit. At least 12 brokerages cut their price targets as a result, the steepest coming from BMO to $250 from $302.
The shares are on track for their worst day since March 2020 and earlier gapped to their lowest level since April. The security also broke below a recent floor at the $310 level and lost support from the 20-day moving average. So far in 2025, LULU has already shed 30%.
Shorts are in control, despite short interest dipping 8% in the last two reporting periods. The 5.94 million shares sold short account for 5.4% of the equity's available float, or nearly three days' worth of pent-up buying power.
Drilling down to today's options activity, 46,000 calls and 26,000 puts have already crossed the tape, or 24 times the volume typically seen at this point. Most popular is the weekly 6/6 260-strike put, where positions are being opened. Those contracts will expire at the close.
Lululemon stock's Schaeffer's put/call open interest ratio (SOIR) of 1.31 sits in the 97th percentile of annual readings. In other words, short-term options traders have been more pessimistic than usual. It's also noting that LULU tended to exceed options traders' volatility expectations over the past year, per its Schaeffer's Volatility Scorecard (SVS) of 96 out of 100.