Lululemon Reports Q2 Earnings with Revenue Decline and Revised Guidance
Lululemon (NASDAQ:LULU) reported second-quarter earnings for fiscal year 2026, showing a revenue decline of 4% to $2.4 billion due primarily to weaker sales in North America and China Mainland. The company noted challenges including brand sentiment issues in China and shifting consumer preferences toward non-legging silhouettes affecting women's leggings sales by approximately 20%. Gross margin improved slightly to 60.5%, driven largely by IEEPA tariff refunds, but was offset by higher markdowns and fixed cost deleverage. Lululemon revised its full-year revenue guidance downward to between $10.35 billion and $10.5 billion—a decline of 5% to 7% compared to the prior year—and lowered EPS expectations to a range of $9.48 to $9.73 from $13.26 in fiscal 2025. The company also reduced its store expansion target for the year and expects Q3 operating margin to fall significantly due to marketing investments and cost pressures.
Tickers: $LULU
Topics: eps guidance revenue sales_performance