Lululemon Cuts 2026 Forecasts Amid Revenue Miss

Lululemon Athletica reduced its full-year fiscal 2026 revenue and earnings forecasts after reporting second-quarter revenue of $2.42 billion, falling short of the $2.46 billion expected by analysts. The company now projects annual revenue to decline between 5% and 7%, with earnings per share expected to drop to between $9.48 and $9.73.

Sales declined by 8% in the Americas and 2% in China. The company attributed these losses to inflation, softening consumer demand, and rising competition from rival brands Alo Yoga and Vuori. Despite the revenue slump, quarterly gross margin increased to 60.5%, bolstered by $134.5 million in tariff refunds.

These financial results arrive one week before Heidi O’Neill, a former Nike executive, assumes the role of CEO. O’Neill is tasked with addressing lackluster product innovation and strategic missteps to revive the company's growth trajectory.