Lululemon shares cratered on Thursday, falling roughly 15% after the athleisure retailer posted another quarter of disappointing results and trimmed its full-year outlook, according to CNBC.
The company reported a 4% decline in revenue and a 9% drop in comparable sales for its fiscal second quarter. The latest figures extend a rough patch for the brand, which had already reduced guidance in the prior quarter.
Interim CEO Meghan Frank attributed part of the weakness to negative chatter about the brand on social media during the quarter, as well as a steeper-than-expected slowdown in core categories such as leggings.
“While we are seeing good guest reaction to our activations and some of our newer styles, the overall response to our product launches remains inconsistent, and we’ve continued to see pressure on the brand in both of our largest markets,” Frank said on a call with analysts.
Quarterly results vs. expectations
For the quarter ended in early August, Lululemon reported net income of $329.2 million, or $2.92 per share, compared with $370.9 million, or $3.10 per share, a year earlier. Analysts polled by LSEG had been looking for earnings per share of about $2.95 on revenue of roughly $2.41 billion, according to consensus estimates cited in the CNBC report.
Revenue came in at $2.37 billion, below the expected $2.41 billion.
Gross profit slipped 1% to $1.5 billion, though gross margin expanded by 5.6 percentage points, helped by a $134.5 million tariff refund.
Guidance cut for Q3 and full year
Looking ahead, Lululemon forecast third-quarter revenue of $2.29 billion to $2.32 billion, representing a decline of roughly 10% to 11% year over year. The company expects earnings of 93 cents to 98 cents per share for the period.
For the full fiscal year, it now expects net revenue of $10.35 billion to $10.5 billion, a drop of 5% to 7% and down from its previous guidance of $11 billion to $11.15 billion. Adjusted earnings are projected at $9.48 to $9.73 per share, versus the prior range of $10.95 to $11.15.
The revised outlook includes a boost from tariff refunds, Lululemon said.
Turnaround efforts and leadership transition
Frank said management is focused on refreshing product assortment and tightening inventory to return to sales growth.
“We know there is much more work to be done,” she said. “Our management team leaders and employees are focused on serving our guests and executing initiatives to drive an inflection in our business.”
The company continues to wrestle with brand relevance, even as it faces public criticism from founder Chip Wilson. New CEO Heidi O’Neill is set to take the helm next week, succeeding Frank, who had stepped into the interim role. O’Neill, a former Nike executive, will inherit the challenge of stabilizing sales and rebuilding momentum in key markets.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/03/lululemon-lulu-q2-2026-earnings.html
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