Lululemon Slides Toward a 52-Week Low After Cutting Its Full-Year Outlook

Lululemon Athletica shares fell about 17% in afternoon trading on Friday, changing hands close to $101 after the athletic-apparel company reported lower quarterly sales and cut its revenue and profit targets for the rest of the fiscal year. The stock was closing in on its 52-week low. Trading was heavy.

A steeper cut to the full-year targets

The company now expects fiscal-2026 revenue of $10.35 billion to $10.5 billion, a decline of 5% to 7% from the prior year and down from guidance that had pointed to flat sales. It also lowered its full-year diluted earnings forecast to between $9.48 and $9.73 a share, from $10.95 to $11.15. Both marks sit below Wall Street’s estimates. Analysts had modeled full-year revenue of $11.03 billion and earnings of $10.84 a share, according to consensus figures cited by Investing.com. Several Wall Street firms lowered their price targets on the stock after the report.

Sales fell fastest in the Americas

The second quarter, which ended August 2, showed the pressure. Net revenue slipped 4% from a year earlier to $2.4 billion, and comparable sales, which track established stores and digital channels, dropped 9%. The weakness was widest at home. Comparable sales fell 12% in the Americas, the company’s largest market, and 3% internationally. China Mainland, until recently its fastest-growing region, turned negative, down 2%.

Tariff refunds flattered the bottom line

Reported earnings of $2.92 a share held up better than the sales line. The figure carried an asterisk. Lululemon booked $134.5 million in refunds of U.S. tariffs, plus $4.1 million in related interest, that together added $0.86 a share to the quarter. Without that benefit, underlying profit would have trailed the prior year’s $3.10. Gross margin still widened. It rose 2 percentage points to 60.5%.

A new chief executive takes over next week

Interim leadership tied the sales miss to softer store traffic, negative commentary about the brand on social media, and a slowdown in core categories such as leggings. The timing is pointed. Heidi O’Neill, a Nike veteran of more than 25 years, becomes chief executive on Tuesday, September 8. Co-CEOs Meghan Frank, the finance chief, and André Maestrini have led the company on an interim basis and are set to return to their earlier roles.

The slide has been building for months

Friday’s move extended a long decline. The stock has fallen 18% over the past month and 27% over three months. It trades far below its 52-week high of $423.32. At $101, the shares sit just above their 52-week low of $97.99. Volume ran more than six times the recent daily average, and the company’s market value has dropped to about $12 billion.

What to watch

O’Neill’s first moves as chief executive top the list, from how she plans to rebuild store traffic to whether she can pull shoppers back to full price. The holiday quarter will test that. Investors will also watch whether the China Mainland reversal deepens or steadies. The next quarterly report, the first under her leadership, is due late this year.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.