Forever Chemicals, Forever Problems: Lululemon (LULU) Faces Texas Probe

TLDR

• Texas AG Ken Paxton opened a civil investigation into Lululemon on April 13, 2026
• Investigation focuses on whether products contain PFAS “forever chemicals”
• LULU stock dropped more than 3% on the news
• AG’s office will review Lululemon’s Restricted Substances List, testing protocols, and supply chain
• The probe adds to a growing list of problems for the company, including declining sales and a CEO transition

Texas Attorney General Ken Paxton issued a Civil Investigative Demand to Lululemon on Monday, sending the stock down more than 3%.

Lululemon Athletica Inc., LULU

The investigation will examine whether the activewear company has misled consumers about the safety and health impacts of its products.

At the center of the probe is whether Lululemon’s clothing contains PFAS — so-called “forever chemicals” — that customers would not expect given how the brand markets itself.

PFAS have been linked to endocrine disruption, infertility, and cancer.

That last line is pointed. Lululemon has built much of its brand around wellness and sustainability, so the framing of the investigation cuts right at the core of its identity.

What the AG’s Office Will Look At

The Texas AG’s office plans to review Lululemon’s Restricted Substances List, its testing protocols, and its supply chain practices.

The goal is to determine whether the company’s products actually comply with its own stated safety standards.

Lululemon generated over $11 billion in revenue in fiscal year 2025, marketing itself as a premium, health-conscious lifestyle brand.

More Trouble for LULU

This investigation lands at an already difficult time for the company.

Lululemon is dealing with declining sales and a sliding stock price heading into 2026.

The company is also going through a CEO transition and facing pressure from an activist investor.

On top of that, company founder Chip Wilson has been publicly pushing for changes to the board of directors.

The Texas probe is the latest item on a growing list of headwinds.

Wall Street’s current consensus on LULU is a Hold, based on ratings from 20 analysts over the last three months. That includes one Buy and 19 Hold recommendations.

The average price target sits at $179.53, which implies roughly 11.5% upside from current levels.

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