Lululemon cuts annual outlook for second time as Americas sales fall 8%

Analysts say they want to see O’Neill halt store expansion

Lululemon Athletica on Thursday cut its full-year sales and earnings outlook for the second time in 2026, lowering revenue guidance to a range of $10.35 billion to $10.50 billion, down from a previous forecast of $11.00 billion to $11.15 billion. The activewear retailer also reduced its earnings-per-share projection to $9.48 to $9.73 from $10.95 to $11.15.

Revenue in the second quarter totaled $2.42 billion, a 4% decline that fell short of the $2.46 billion analysts had projected. Sales in the Americas fell 8%, while international revenue rose 4%. Same-store sales dropped 9%, worse than the 4.6% decline Wall Street had forecast.

Profit was $329.2 million, or $2.92 a share, compared with $370.9 million, or $3.10 a share, a year earlier. The quarter’s profit included 86 cents a share from tariff refunds and associated interest, net of tax.

For the current quarter, Lululemon said it expects revenue of $2.29 billion to $2.32 billion, below analysts’ forecast of $2.53 billion, with earnings per share of 93 cents to 98 cents. The company said it is taking a “prudent approach” with its guidance because “the challenging dynamics it has faced in recent quarters hasn’t gone away.”

Heidi O’Neill, a former Nike executive, is scheduled to take over as chief executive next week, a move shareholders have been highly anticipating. Investors are hoping she can steer a turnaround after what the Journal described as a series of “bad moments” for the brand, many of which have played out publicly. After her appointment, Lululemon shares dropped as investors critiqued her tenure at Nike.

Analysts said they want to see O’Neill stop expanding stores, focus on improving North American sales, and refocus on core products and traditional color palettes.

In the spring, the company made peace with its founder, Chip Wilson, who had spent years criticizing Lululemon and trying to overhaul the board through a proxy fight. Wilson, the company’s biggest shareholder, settled with Lululemon after a long negotiation, agreeing to sign a nondisparagement agreement in exchange for the right to name two board directors.

Lululemon executives told the Journal in June that first-quarter sales were dented by negative online narratives about the brand. The Journal also reported that several product launches had failed to meet expectations and that Lululemon had lost more North American customers to competitors such as Alo and Vuori.