Lululemon Stock Plummets on Revenue Miss and Drastic Guidance Cut

Lululemon Athletica (LULU) shares plunged in after-hours trading after the athletic apparel company reported a miss on quarterly revenue and issued a sharply reduced financial forecast for the full year, signaling deeper-than-expected business challenges.

Disappointing Results and Slashed Outlook

For the second quarter of fiscal year 2026, Lululemon reported revenue of approximately $2.4 billion, falling short of analyst consensus estimates of $2.46 billion. The figure represents a roughly 4% decline year-over-year, while comparable sales dropped 9%.

While the company posted adjusted earnings per share (EPS) of $2.92, well above the $1.82 consensus, the beat was significantly inflated by a one-time benefit. The figure included $0.86 per share from tariff refunds and related interest. Excluding this item, the underlying EPS was closer to $2.06.

The most significant blow to investor confidence came from the company's revised forward guidance. Lululemon dramatically cut its full-year outlook, forecasting a revenue decline of 5% to 7%, a stark reversal from its prior guidance of flat to down 1%. The company also lowered its full-year EPS forecast to a range of $9.48–$9.73, down from $10.95–$11.15.

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Market Reaction and Investor Concerns

The market reacted swiftly to the negative report, with Lululemon's stock falling 17.3% to $100.69 in after-hours trading. The drop pushed the stock toward its 52-week low and deepened a year-to-date decline that already exceeded 40% prior to the announcement.

Compounding investor anxiety is a pending leadership change, with incoming CEO Heidi O’Neill set to officially take the role on September 8. The severe guidance cut just before her tenure begins raises questions about the timeline for a potential turnaround amid what the company has described as a more promotional and competitive environment in North America.