Lululemon Faces Sales Decline as Customers Shift Toward Competitors
Lululemon reported a significant drop in sales during the second quarter of 2026, with North American comparable sales declining by 12% year over year and net revenue falling by 8%. The company attributed this downturn to shifting consumer preferences from tight athletic wear to looser fits, which led to a 20% decline in leggings sales. Additionally, negative media coverage and underwhelming product launches further impacted store traffic and overall performance. Analysts have responded with skepticism, as BMO Capital Markets downgraded Lululemon's stock rating to 'underperform' with a $70 price target, predicting an additional 28% decline from its closing price. The firm noted that the company is losing market share in key regions like North America and China to smaller competitors such as Alo Yoga and Vuori. BofA Global Research also revised its outlook downward, lowering Lululemon's earnings forecasts for both fiscal years 2026 and 2027. The broader retail landscape has become more challenging due to cautious consumer spending on discretionary items like athleisure wear. Foot traffic at Lululemon stores continued to decline in the summer months of June, July, and August according to Placer.ai data.
Tickers: $LULU
Topics: earnings report market share loss retail sales decline stock rating