Lululemon Shares Drop 20% After Revenue Outlook Cut
Lululemon (NASDAQ:LULU) shares fell nearly 20%, reaching their lowest level in eight years, after the athleisure brand slashed its full-year revenue guidance from growth to a projected decline of up to 7%. The Q2 FY2026 report showed $2.42 billion in revenue, down 4.3% year over year and below expectations, with comparable sales dropping globally by 9%, including an Americas drop of 12%. Leggings saw the steepest segment decline at around 20%. The company also cut its full-year FY2026 EPS guidance to $9.48–$9.73 from a prior range of $12.10–$12.30. Incoming CEO Heidi O'Neill is set to begin next week and will conduct a strategic review, as the company faces challenges including declining sales in key product lines and operating margins expected to fall sharply in Q3. The stock has fallen 51.85% year-to-date and now trades at $100.07. Analysts are watching for clarity on tariffs, O'Neill's turnaround strategy, and holiday season performance as potential turning points. The guidance cut reflects a significant shift from earlier optimism, with Q3 revenue expected to contract by 10–11%. CFO Meghan Frank described the revised outlook as prudent in light of current conditions.
Tickers: $LULU
Topics: financial performance retail stock market