Lululemon Cuts Full-Year Forecast to US$10.35 Billion as Sales Slide

Lululemon Athletica lowered its full-year sales forecast to between US$10.35 billion and US$10.5 billion, posting its second consecutive guidance downgrade in three months.

Comparable store sales dropped 9 per cent across the second quarter ended August 2, falling below market estimates and marking the company’s first quarterly decline on that metric since the pandemic.

Shares tumbled 15 per cent in extended trading in New York following the announcement. The activewear maker has seen its equity lose more than 40 per cent of its value in 2026, trading at less than a quarter of its late-2023 record high.

Slumping Americas and Rising Rivals

Revenue in the Americas contracted 8 per cent during the quarter, while women’s apparel sales slipped 4 per cent. International revenue offered the lone bright spot, rising 4 per cent across overseas markets.

Discounts and design missteps have eroded the brand’s pricing power across primary markets, opening space for fast-growing athleisure competitors such as Alo and Vuori. In Asia-Pacific, where premium sportswear demand has remained relatively steady, Lululemon faces a tight battle against agile regional entrants alongside these expanding Western labels.

“While we continue to navigate some challenging dynamics, we are taking a prudent approach with our revised full-year outlook,” interim co-chief executive Meghan Frank said.

Leadership Handover and Boardroom Truce

Former Nike executive Heidi O’Neill assumes the chief executive role next week, concluding a four-month transition period after her appointment. She inherits depleted executive ranks following several senior departures this year.

O’Neill must also manage relations with billionaire founder Chip Wilson. Wilson entered a cooperation pact with the board in May, agreeing to regular strategy sessions with O’Neill and an 18-month freeze on public criticism.

Her first major operational milestone arrives with the release of third-quarter earnings in December, when investors will assess whether the product pipeline can arrest the slide in North American foot traffic.