Lululemon stock plunges 15% on disappointing earnings and outlook — SkimNews
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- Lululemon shares fell 15% on Thursday after Q2 revenue declined 4% and comparable sales dropped 9%, marking the latest in a string of weak quarters
- Lululemon cut its full-year revenue guidance to $10.35–$10.5 billion (a 5–7% decline), down from prior guidance of $11–$11.15 billion, and trimmed EPS outlook to $9.48–$9.73 from $10.95–$11.15
- Interim CEO Meghan Frank attributed the weakness to "negative commentary" on social media and a "greater-than-expected" slowdown in core categories including leggings, with brand pressure in both of the company's largest markets
- Q2 revenue came in at $2.42 billion versus $2.46 billion expected, while net income fell to $329.2 million ($2.92/share) from $370.9 million ($3.10/share) a year earlier
- Lululemon reported gross margin expanded 5.6% thanks to a $134.5 million tariff refund, even as gross profit declined 1% to $1.5 billion
- Founder Chip Wilson has been publicly critical of the company as incoming CEO Heidi O'Neill prepares to take the reins next week
Why it matters: Lululemon has cut guidance two quarters running and now expects full-year EPS of $9.48–$9.73, roughly 13% below prior guidance of $10.95–$11.15. Incoming CEO Heidi O'Neill takes over next week amid founder Chip Wilson's public criticism, inheriting a weakening core-leggings business and activist-founder scrutiny simultaneously.
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