Canadian sportswear giant lululemon athletica has cut its FY2026 outlook again. Incoming CEO Heidi O'Neill, who will take office next week, will work to win back customers lost to emerging rivals by refreshing the company's product lines.
The company lowered its FY2026 full-year revenue outlook from flat to down as much as 1%, then made a substantial further revision to a decline of 5–7%. Its EPS outlook also fell from $10.95–$11.15 to $9.48–$9.73.
Second-quarter revenue was $2.42 billion, below the $2.46 billion forecast by LSEG. The share price plunged about 18% in after-hours trading following the earnings announcement.
Weakness in the China market was cited as the main cause of the deterioration in performance. Sales declined 2% year on year excluding currency movements, compared with 24% growth a year earlier. The decline in China was also said to have been affected by negative reactions to the company's marketing.
Sales in the Americas shifted from 1% growth to an 8% decline year on year, making it more difficult to regain the brand's presence. Sales of core products, led by leggings, also fell about 20%.