The investigation follows two major market drops for the apparel retailer in 2026. On June 5, shares fell 8.56% after management attributed cooling store traffic to negative media and social media commentary. While Interim Co-CEOs Meghan Frank and Andrew Maestrini initially dismissed these issues as temporary, the situation deteriorated by early September. Following the company's second-quarter earnings call on September 3, Lululemon stock plummeted an additional 17.38% as leadership admitted that negative sentiment had intensified, further compounded by fallout from a promotional event held on the Great Wall of China.

Attorneys are now scrutinizing whether these disclosures, along with guidance regarding growth in China and North American sales, misrepresented the company’s actual financial health. Investors who purchased LULU stock at prices they allege were artificially inflated are being encouraged to submit their transaction records for review. Levi & Korsinsky, a firm frequently involved in shareholder rights litigation, is evaluating these claims to determine if the company misled the market regarding its outlook for fiscal 2026.