News / US / cnbc
Lululemon Shares Tumble 15% Following Weak Quarterly Results and Guidance Cuts
Consumer Non-Durables · Apparel/Footwear · cnbc · 2026-09-03
LULU
Lululemon stock dropped sharply after the retailer reported a revenue decline and lowered its full-year financial outlook amid ongoing growth challenges.
What Happened
Quarterly Financial Performance: Lululemon reported a 4% decline in revenue and a 9% drop in comparable sales for the second fiscal quarter, missing analyst expectations of $2.46 billion. Net income fell to $329.2 million, or $2.92 per share, compared to $370.9 million in the same period last year.
Revised Annual Guidance: The company significantly reduced its full-year revenue outlook to a range of $10.35 billion to $10.5 billion, down from previous estimates of $11 billion. Earnings per share projections were also lowered to between $9.48 and $9.73, reflecting a difficult environment for the apparel retailer.
Operational and Margin Pressures: Despite a 5.6% increase in gross margin aided by a $134.5 million tariff refund, gross profit still saw a 1% decline. Management is navigating a period of reduced consumer demand and brand relevancy issues that have persisted over multiple quarters.
Leadership and Market Context: As the company struggles to regain its competitive footing, it prepares for a leadership transition with Heidi O'Neill set to take over as CEO. The stock's 15% plunge underscores investor concern regarding the brand's ability to navigate current headwinds and restore growth.