The athletic apparel giant lowered its revenue and earnings outlook, sending shares sharply lower in premarket trading.
Lululemon shares fell more than 10% in premarket trading on Friday after the company reduced its full-year financial guidance and issued a weaker-than-expected forecast for the second quarter of 2026.
The update comes just months before incoming CEO Heidi O’Neill takes the helm, as the company faces slowing sales growth and increasing competition.
KEY DETAILS
For the second quarter of 2026, Lululemon expects revenue between $2.45 billion and $2.48 billion, below Wall Street’s estimate of $2.6 billion.
Adjusted earnings are projected at $1.76 to $1.81 per share, missing analysts’ expectations of $2.69 per share.
Interim co-CEO and CFO Meghan Frank said the company has been dealing with “headwinds” that prompted management to revise its full-year outlook. She added that Lululemon is taking further steps to strengthen its product offering and reposition parts of the business where needed.
The company lowered its full-year revenue forecast to a range of $11 billion to $11.15 billion, down from its previous guidance of $11.35 billion to $11.5 billion.
Adjusted earnings guidance was also reduced to $10.95 to $11.15 per share, compared with the earlier forecast of $12.10 to $12.30.
Despite the weaker outlook, first-quarter results were largely in line with expectations. Revenue rose 4% year-over-year to $2.47 billion, while adjusted earnings per share matched forecasts at $1.69. Same-store sales increased 1%, beating expectations for a 0.1% decline.
MARKET REACTION
Lululemon stock dropped more than 10% in premarket trading as investors reacted to the lower guidance. The announcement could also draw attention to the broader retail and consumer discretionary sector as traders assess spending trends.
WHY IT MATTERS
For traders, weaker guidance often carries more weight than past earnings results. Lululemon’s forecast suggests pressure on future growth, making upcoming sales data and management updates especially important.
CONCLUSION
Investors will now focus on the company’s performance in the coming quarters and the leadership transition when former Nike executive Heidi O’Neill officially becomes CEO on September 8.
Stay ahead of every market-moving headline - start trading with a broker built for moments like this: TradeQuo.com
