Incoming CEO Heidi O’Neill inherits a company under pressure as weak guidance rattles investors.
Lululemon just gave Wall Street a rough Friday. The athleisure giant cut its full-year revenue and earnings forecasts, and shares dropped more than 10% in premarket trading.
KEY DETAILS
For Q2 2026, Lululemon expects net revenue between $2.45B and $2.48B – well short of Wall Street’s $2.6B estimate. Adjusted earnings guidance of $1.76–$1.81 also missed the Street’s $2.69 forecast by a wide margin.
The full-year picture got trimmed too. Revenue outlook now sits at $11B–$11.15B, down from the previous $11.35B–$11.5B range. Adjusted earnings guidance fell to $10.95–$11.15, compared with the earlier forecast of $12.10–$12.30.
Interim co-CEO and CFO Meghan Frank cited “headwinds” and said the company is taking steps to “reposition where needed.”
Q1 results were more reassuring: revenue rose 4% to $2.47B, adjusted EPS came in at $1.69 as expected, and same-store sales grew 1%, beating the 0.1% decline analysts had penciled in.
MARKET REACTION
LULU fell over 10% in Friday premarket trading, dropping to around $111.60 from a $124.92 close.
WHY IT MATTERS
Guidance cuts of this size signal more than a rough quarter. With competition intensifying and sales growth slowing, the numbers suggest real pressure on the brand, not just a temporary blip.
WHAT TO WATCH
Nike veteran Heidi O’Neill takes the CEO chair on September 8. Her turnaround strategy, and whether she can reignite growth, will define Lululemon’s next chapter. Professionals see “reasons for optimism,” but the leadership transition appears to be weighing on sales.
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