Lululemon shares tumble 18% as revenue forecast slashed ahead of CEO transition

Lululemon’s shares fell nearly 18% after the company announced a steep reduction in its fiscal 2026 guidance, now expecting revenue between $10.35 billion and $10.50 billion, a 5-7% decline from the prior year, and earnings of $9.48-$9.73 per share, down from $10.95-$11.15. The downgrade follows an 8% revenue drop and a 12% plunge in comparable sales in the Americas, linked to product missteps such as the withdrawn $98 Breezethrough leggings and a paused new line over fabric concerns.

Women’s apparel, which accounts for 63% of sales, saw legging sales fall roughly 20%, while rivals Alo Yoga and Vuori captured market share, pushing Lululemon’s athleisure share to 43.9% in August. Store expansion outpaced sales growth, with 811 stores and 11% more square footage but only a 1% rise in store revenue and a 9.4% drop in sales per square foot. The company is preparing a leadership transition, with former Nike executive Heidi O’Neill set to replace Calvin McDonald as CEO on Sept. 8.