Q2 Earnings Reset, Structural Demand Decline, and Valuation Risk

The September 3 fiscal 2026 Q2 report confirmed sharp deterioration: revenue fell 4.3%, comparable sales declined 9%, Americas comps dropped 12%, North America fell 8%, and leggings sales fell about 20%. Shares closed at $101.30 on September 21 after a 3.3% gain, but remain more than 50% below their 2026 starting level; lowered guidance, tariff-aided profitability, rising promotions, analyst target cuts, and uncertain FY27 visibility keep the reset active.