Lululemon cuts 2026 forecast after Q2 revenue falls 4%

September 4, 2026 at 02:01 AM2 min

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Lululemon cut its full-year revenue and profit forecast after reporting a 4% decline in second-quarter revenue to $2.4 billion. Shares dropped as much as 20% in after-hours trading on Thursday. The revision comes as Nike veteran Heidi O'Neill prepares to take over as CEO next week.

Key Facts

Lululemon's Q2 fiscal 2026 revenue fell 4% to $2.4 billion, with comparable sales down 9%.
The company now expects full-year net revenue of $10.35 billion to $10.5 billion, a decline of 5% to 7%.
Adjusted earnings per share are projected at $9.48 to $9.73 for 2026.
Heidi O'Neill, a Nike veteran, becomes CEO next week.
Lululemon shares sank in April after O'Neill's appointment was announced.

Earnings Miss

Lululemon reported second-quarter fiscal 2026 revenue of $2.4 billion, a 4% decline from the prior year. Comparable sales decreased 9% in the quarter. Interim co-CEO and CFO Meghan Frank said the company is taking a prudent approach with its revised full-year outlook. The stock dropped as much as 20% in after-hours trading on Thursday.

Revised Guidance

For 2026, Lululemon now expects net revenue between $10.35 billion and $10.5 billion, representing a decline of 5% to 7%. Adjusted earnings per share are expected to be in the range of $9.48 to $9.73 for the year. Morningstar senior equity analyst David Swartz said the company has no debt and the problem is with sales growth. Swartz added that incoming CEO Heidi O'Neill's experience at Nike should be positive for the company.

Leadership Transition

Heidi O'Neill, a Nike veteran, will take over as CEO next week. Lululemon shares sank in April after the company announced O'Neill as its next CEO. In May, the company and founder Chip Wilson reached an agreement to settle a long-running dispute over the board's leadership. One point of contention in the proxy battle between Wilson and the board was the selection of O'Neill.