For the second quarter of 2026, Lululemon reported a revenue decline of 4% from last year, while comparable sales saw a bigger drop of 9% year-on-year. The revenue figure of $2.42 billion was lower than analyst expectations of $2.46 billion.
Interim CEO Meghan Frank attributed the poor quarterly results to “negative commentary” on social media which impacted the company’s performance. Frank also cited a “greater-than-expected” slowdown in some of its core categories, such as leggings.
Things do not improve in the ongoing quarter either. The company expects revenue to be between $2.29 billion to $2.32 billion, which will represent a decline of 10% to 11% from the same quarter last year.
Lululemon has also trimmed its full-year revenue guidance, having already cut back on the same in the first quarter. The company now sees revenue to be between $10.35 billion to $10.5 billion, which will mean a decline of 5% to 7% from the year-ago. It had earlier guided for that figure to be between $11 billion to $11.15 billion.
Outlook for Lululemon’s Earnings Per Share (EPS) has also been narrowed to $9.48 to $9.73 per share, from the $10.95 to $11.15 that it had guided for earlier. Guidance has been slashed even after accounting for tariff refunds from the Trump Administration.
Although the company’s gross margin grew to 5.6%, boosted by a tariff refund of $134.5 million, the gross profit fell 1% to $1.5 billion.
On the earnings call, interim CEO Frank said that the company is now focusing on introducing new styles and tighten its inventory to return to growth in sales.
“We know there is much more work to be done,” Frank said. “Our management team leaders and employees are focused on serving our guests and executing initiatives to drive an inflection in our business,” the interim CEO added.
Lululemon’s new CEO Heidi O’Neill will take charge next week. The stock ended 18.2% lower in the extended session to close below the mark of $100 at $99.65. The stock has been a major underperformer this year, declining 42% so far.
(With Inputs From Agencies.)
