Lululemon earnings for the second fiscal quarter came in well short of what Wall Street had been expecting, and the Lululemon stock price sank as much as 18.17% in after hours trading, one of the sharper single day drops the retailer has had in a while. Net revenue slipped 4% to $2.42 billion, missing the $2.46 billion analysts were looking for, and comparable sales dropped 9%. The Lululemon earnings report also came with a weaker Lululemon earnings forecast for the rest of the year, and shares fell to $99.65 after hours, a drop of $22.12, well below the stock’s 52 week low of $104.44. It’s also the latest in a run of Lululemon stock falls that have dogged the company through most of 2026.
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Lululemon Earnings Miss Sends Stock Lower as Outlook Slumps
This Lululemon earnings report pinned a lot of the blame on weak demand in North America, and on an inconsistent response to new product launches too. Comparable sales fell 9%, or 10% on a constant dollar basis, with Americas comparable sales down 12% and international comparable sales down 3%, or 6% in constant currency. Interim Co-CEO and CFO Meghan Frank also pointed to a bigger than expected slowdown in categories such as leggings, plus some negative social media commentary that weighed on the quarter.
Meghan Frank, Interim Co-CEO and Chief Financial Officer, had this to say on the earnings call:
“While we are seeing good guest reaction to our activations and some of our newer styles, the overall response to our product launches remains inconsistent, and we’ve continued to see pressure on the brand in both of our largest markets.”
Gross margin still rose 200 basis points to 60.5%, and a $134.5 million tariff refund pushed a good chunk of that increase along. Net income was $329.2 million, or $2.92 per diluted share, down from $370.9 million, or $3.10 per share, a year earlier, and it’s a fairly stark reminder of how far this quarter’s Lululemon earnings fell from last year’s pace.
Lululemon Cuts Full-Year Earnings Forecast
The Lululemon earnings forecast for the third quarter calls for net revenue of $2.29 billion to $2.32 billion, a decline of 10% to 11%, with diluted earnings per share of $0.93 to $0.98. This latest Lululemon earnings report also lowered the full-year outlook, with the company now guiding full-year net revenue to $10.35 billion to $10.5 billion, down from a prior $11 billion to $11.15 billion, and full-year earnings per share now sitting at $9.48 to $9.73, down from $10.95 to $11.15.
Meghan Frank said this in the company’s official earnings release:
“While we continue to navigate some challenging dynamics, we are taking a prudent approach with our revised full-year outlook. Our teams remain focused on accelerating growth by strengthening our product offerings, increasing our marketing investments, and maintaining disciplined expense management. Looking ahead, we have confidence in the strength of the lululemon brand, the deep connection we have with our guests and ambassadors, and the significant opportunities we see to drive long-term growth.”
Source: Corporate.Lululemon
New CEO Heidi O’Neill Set To Take Over
Frank and Interim Co-CEO André Maestrini have steered Lululemon since its last chief executive left, and incoming CEO Heidi O’Neill officially starts next week. Right now, the Lululemon stock price remains under pressure from that same leadership uncertainty, and the Lululemon stock falls of the past year have made a lot of shareholders understandably nervous, though Maestrini, who is also President and Chief Commercial Officer, struck a fairly hopeful tone anyway.
André Maestrini, Interim Co-CEO, President and Chief Commercial Officer, had this to say in the earnings release:
“We remain confident in our ability to take the right steps to strengthen our performance and deliver sustainable growth over time. I would like to thank our teams around the world for their focused efforts and continued commitment to lululemon. We look forward to welcoming our incoming CEO, Heidi O’Neill, next week as we begin an exciting new chapter for the company.”
Source: Corporate.Lululemon
The company also ended the quarter with $1.4 billion in cash and $593.7 million of available credit facility capacity. Lululemon bought back 2.7 million shares for $330 million and opened nine net new stores, ending with 825 locations in total, and at the time of writing, investors are still watching both the Lululemon stock price and the Lululemon earnings forecast pretty closely heading into O’Neill’s first weeks in charge.