Lululemon shares plunge 18% as retailer slashes – Business News
Lululemon’s turnaround is getting a lot more painful.
Shares of the dear yoga pants-maker plunged 17% on Friday to an eight-year low after weak Americas gross sales compelled it to slash its full-year outlook.
The disappointing figures got here as incoming CEO Heidi O’Neill was set to take the reins of the company subsequent Tuesday.
The stock closed at $100.61 on Friday afternoon after hitting a 52-week low of $97.99, wiping billions of {dollars} from the company’s market worth.
Lululemon now expects fiscal 2026 income to fall 5% to 7%, a sharp reversal for a company that after focused $12.5 billion in gross sales this yr. Getty Images
The selloff adopted a dismal second quarter by which income fell 4% to $2.42 billion and comparable gross sales sank 9% worldwide.
The harm was worse within the Americas, the place income dropped 8% and comparable gross sales tumbled 12% as the athletic-apparel giant struggles to win back buyers after a string of product missteps.
Lululemon now expects fiscal 2026 income between $10.35 billion and $10.50 billion, down 5% to 7% from final yr.
Just three months in the past, the company forecast income of $11 billion to $11.15 billion.
The Vancouver-based biz additionally slashed its full-year earnings forecast to $9.48 to $9.73 a share from $10.95 to $11.15 beforehand.
Incoming CEO Heidi O’Neill is set to take the reins at Lululemon on Sept. 8 as the athletic-apparel giant grapples with falling gross sales and product missteps. LinkedIn/Heidi O’Neill
And the ache isn’t anticipated to let up quickly. Third-quarter steering requires income to plunge between 10% and 11%.
The ugly numbers imply O’Neill’s work is cut out for her as Lululemon grapples with product missteps, weaker store productiveness and intensifying competitors. The ex-Nike exec will exchange Calvin McDonald, who exited the company beneath heavy stress on the finish of January.
Lululemon’s comparable gross sales in North America fell 3% within the second quarter of fiscal 2024, when Lululemon pulled its $98 Breezethrough leggings following complaints about their match and design.
By the second quarter of fiscal 2025, Americas comps had been down 4%. They have now deteriorated to a 12% decline.
Another product headache surfaced in January, when Lululemon paused online gross sales of its new line after buyer complaints, together with considerations that the cloth was too sheer.
The misses have been particularly damaging as a result of girls’s attire accounted for 63% of Lululemon’s fiscal 2025 income.
Leggings gross sales dropped roughly 20% within the newest quarter as buyers gravitated towards looser-fitting kinds.
Lululemon shares plunged practically 18% Friday after the company reported falling gross sales and sharply cut its full-year outlook. Perplexity AI
Rivals Alo Yoga and Vuori have been grabbing market share at Lululemon’s expense.
Lululemon’s share of the athleisure market fell 10 share factors to 43.9% in August, whereas Alo gained 5.9 factors and Vuori picked up 2.2 factors, M Science information confirmed.
Lululemon additionally seems to have constructed its operation for growth that by no means arrived.
The company ended fiscal 2025 with 811 shops, up from 767 a yr earlier, whereas sq. footage expanded 11%.
But income from company-operated shops elevated simply 1%, and gross sales per sq. foot sank 9.4% to $1,426 from $1,574.
