Lululemon cuts revenue forecast for second time in months as outlook deteriorates — SkimNews
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- Lululemon lowered its fiscal 2026 net revenue forecast to a 5-7% decline (roughly US$10.35-billion to US$10.5-billion) — the second cut in three months, after previously projecting flat to down 1%.
- Shares tumbled approximately 18% in post-market trading after the announcement.
- CFO Meghan Frank cited "pressure" in both largest markets — North America and mainland China — and called the response to product launches "inconsistent"; comparable sales fell 9% versus analyst expectations of 5.8% growth.
- Leggings sales dropped roughly 20% in the second quarter as shoppers shifted to wider-leg styles; the company is "aggressively" reordering Groove pants, Align joggers, and Dance Studio pants.
- Q2 net revenue came in at US$2.4-billion (down 4% year-over-year) and net income fell to US$329.2-million (US$2.92 per share) from US$370.9-million (US$3.10 per share) a year earlier.
- Incoming CEO Heidi O'Neill, a Nike veteran, joins next week to lead the turnaround; the company is taking an "even more aggressive" cost-cutting stance on travel, professional fees, and store labour hours while slowing hiring.
Why it matters: The double downgrade in three months signals Lululemon's relevance problem — fading leggings demand, a shift to wide-leg silhouettes, and rising competition from Alo, Vuori, and Gymshark — is accelerating, not stabilizing. New CEO Heidi O'Neill inherits a brand that missed comparable-sales expectations by roughly 15 percentage points, with shares down 18% in a single session.
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