Lululemon Cuts Full-Year Outlook as New CEO Takes Over
lululemon (NASDAQ:LULU) has cut its full-year revenue and profit forecasts for the second time in 2026, citing a challenging market environment. The company now expects fiscal year 2026 revenue between $10.35 billion to $10.5 billion, down from previous guidance of $11.0 billion to $11.15 billion. This follows second-quarter results showing a 4% drop in revenue and a global decline in comparable sales by 9%. The stock fell nearly 18%, reaching an eight-year low. Incoming CEO Heidi O'Neill, who previously led Nike's women’s apparel division, is set to take over on September 8. Her experience may help address product issues and restore customer interest. International markets showed resilience with a 4% revenue increase in the second quarter despite North American sales falling by 8%. The company holds $1.4 billion in cash, providing flexibility for investment during her leadership transition. However, lululemon faces significant challenges including declining market share in athleisure and rising competition from brands like Alo Yoga and Vuori. Management also anticipates a further revenue decline of 10% to 11% in the third quarter.
