VANCOUVER – Lululemon Athletica lowered its full-year outlook for a second straight quarter, signalling deep challenges for incoming chief executive officer Heidi O’Neill.
Sales are now projected to be in a range of US$10.35 billion to US$10.5 billion in the current fiscal year that ends in early 2027.
That is down from June’s annual forecast, which was itself lowered from the previous view.
In the second quarter, Lululemon’s comparable sales, which measure stores open at least a year, fell 9 per cent, below the average of estimates compiled by Bloomberg.
It is also the first decline since the pandemic, when the company temporarily stopped reporting the measure.
The stock fell about 15 per cent at 4.09pm in extended trading in New York.
Lululemon shares have declined more than 40 per cent so far in 2026, and as of Sept 3’s close their value was less than a quarter of the stock’s peak in late 2023.
“While we continue to navigate some challenging dynamics, we are taking a prudent approach with our revised full-year outlook,” Meghan Frank, Lululemon’s interim co-CEO said.
The weak results and lowered guidance suggest that O’Neill’s task will be a difficult one as she looks to pull the company back from an extended slowdown that has pummelled the stock and sparked a management reset.
A former Nike executive, O’Neill is scheduled to take the reins next week, more than four months after being named to the role.
The yogawear retailer’s results were particularly weak in the Americas in the quarter ended Aug 2, with revenue there falling 8 per cent.
Women’s apparel revenue declined 4 per cent, while international revenue rose 4 per cent.
O’Neill’s immediate task will be to come up with a plan to win back market share from competitors like Alo and Vuori and rebound from product mishaps and an overreliance on discounts.
She will also have to rebuild Lululemon’s executive team following a series of recent departures.
Additionally, O’Neill will need to ensure that founder Chip Wilson is on board with her plans.
The billionaire repeatedly criticised Lululemon’s management and strategy before agreeing to a cooperation agreement in May.
As part of the pact, he will have regular meetings with O’Neill and refrain from speaking negatively about the company for about 18 months. BLOOMBERG
