Lululemon Options Signal Defensive Stance Ahead of Earnings Report

Options traders are positioning with caution for Lululemon Athletica Inc.'s (LULU) upcoming earnings report, with trading data indicating a slight defensive bias and heightened uncertainty around the stock's potential reaction. The activity suggests investors are bracing for a significant price move but are more actively hedging against a potential downturn.

Options Activity Signals Caution

Ahead of its after-hours earnings release on September 3, 2026, total options volume in Lululemon reached 60,152 contracts. Put options, which can be used to bet on or hedge against a price decline, moderately outnumbered call options, pointing to a cautious sentiment among traders.

Key figures from the session, as reported by Investing.com, include:

• Puts Traded: 31,375 contracts
• Calls Traded: 28,777 contracts
• Put/Call Volume Ratio: 1.09

A put/call ratio above 1.0 is typically viewed as bearish. However, this modest level suggests cautious hedging activity rather than outright bearish speculation.

Key Levels Frame Expectations

Ad

Trading activity was concentrated around specific strike prices, framing the market's expectations for a post-earnings move from the stock's price of $119.86. The most notable volume defined a corridor between the $110 puts and the $130 calls, implying traders are focused on a potential move of approximately 8.5% in either direction.

Significant activity was also observed in deeper out-of-the-money puts, including the $90 strike. The volume there far exceeded prior open interest, suggesting new positions were being established to protect against a more substantial price drop.

Volatility and Skew Offer Nuance

A mixed signal from volatility metrics adds further context. While overall three-month implied volatility declined, the skew between puts and calls rose, according to Investing.com. This indicates that the relative cost of downside protection (puts) has increased compared to upside participation (calls).

This combination suggests that while the market is not pricing in an extreme overall shock, traders are more concerned about a negative surprise—potentially related to the company's forward guidance—than a positive one. Lululemon is expected to report consensus earnings per share of $1.82 on revenue of $2.46 billion.