Lululemon Cuts Full-Year Guidance, Shares Drop
Lululemon Athletica on Thursday lowered its full-year revenue and earnings guidance, causing shares to fall more than 9% in after-hours trading.
Challenges in Consumer Spending
The athleisure brand faces a period of subdued consumer spending, driven by high interest rates, inflationary pressures, and geopolitical uncertainties. Lululemon’s Americas segment, in particular, has struggled to show significant improvement.
Q1 2026 Earnings
For the first quarter of 2026, LULU reported earnings of $1.69 per share on revenue of $2.47 billion, meeting profit expectations and slightly exceeding revenue forecasts of $2.44 billion. Quarterly comparable sales increased 1%, supported by a 13% jump in international sales, while Americas comparable sales fell 5%. Interim co-CEO and CFO Meghan Frank highlighted a “sequential improvement in full-price sales” in the Americas.
Q2 2026 Outlook
Lululemon also provided guidance for the second quarter, projecting earnings of $1.76–$1.81 per share on revenue of $2.45–$2.475 billion. Both estimates fell short of analyst expectations.
Revised Full-Year 2026 Guidance
The company revised its fiscal 2026 full-year guidance, now anticipating earnings of $10.95–$11.15 per share on revenue of $11–$11.15 billion. This compares to prior guidance of $12.10–$12.30 per share on revenue of $11.35–$11.50 billion. Meghan Frank cited ongoing headwinds as the reason for the adjusted outlook.
Strategic Moves and Leadership Changes
Despite recent financial challenges, Lululemon has taken strategic actions to strengthen its business. In April, Nike veteran Heidi O’Neill was appointed as the company’s next top executive. In May, LULU resolved a proxy dispute with founder and major shareholder Chip Wilson, granting him two board seats. Frank emphasized that the company is taking steps to reposition the business and enhance its product development engine, remaining confident in its long-term path forward.
