Shares fell about 20% in premarket trading after the company lowered its forecast and reported declining sales in North America
Lululemon shares fell sharply on Friday, September 4, after the company once again lowered its outlook for fiscal 2026.
The stock dropped about 20% in premarket trading, adding pressure on the athletic apparel company as it works to restore growth in its largest market.
Sales decline in North America
Lululemon is facing particular challenges in North America, where revenue fell 8% in the second quarter.
The company reported total revenue of approximately $2.42 billion for the period.
Known primarily for its leggings and premium athletic apparel, Lululemon is facing increasingly intense competition for consumers.
Brands such as Alo Yoga and Vuori have gained ground in the athletic and casual apparel market, increasing competition in a segment where Lululemon had long been one of the leading names.
Company cuts its outlook again
Lululemon now expects fiscal 2026 revenue to decline between 5% and 7%.
Previously, the company had projected results ranging from flat sales to a decline of approximately 1%.
It marks another downward revision to the company’s expectations after it had already lowered its outlook amid weakening sales in the U.S. market.
New CEO takes over at a challenging time
The results add to the challenges facing Heidi O’Neill as she prepares to take over as Lululemon’s CEO.
Among her main priorities will be refreshing the company’s product lineup and trying to win back consumers who have shifted to competing brands.
Company executives have acknowledged that significant work remains to improve the business’s performance.
Source: Reuters
