Lululemon trims store rollout and cuts revenue outlook amid sales slump
Lululemon is scaling back its expansion, targeting about 35 new stores this year and reducing pop-up locations, after a quarter where revenue fell 4% and key product sales dropped sharply.
Lululemon announced a reduction in its growth plans, now aiming to open about 35 company-run stores this year instead of the previously projected 40, and to cap pop-up locations at roughly 40 by the end of 2026, down from 65 at the close of last year. The retailer reported a 4% drop in quarterly revenue to $2.42 billion, with sales at stores open for at least a year falling 9% and the crucial Americas region slipping 8%.
A major factor is a 20% plunge in women's leggings sales, as customers move toward looser, "away-from-body" styles, leading Lululemon to expand its range of wide-leg pants and joggers. Interim CEO Meghan Frank said the company remains committed to leggings but must adapt to shifting tastes. Competition from newer brands such as Alo Yoga and Vuori is intensifying, and product issues like the recall of $108 "Get Low" leggings have added pressure.
The stock fell nearly 18% to an eight-year low, and the full-year revenue forecast was cut to $10.35-$10.5 billion from $11-$11.15 billion. Former Nike executive Heidi O'Neill will assume the CEO role, inheriting a business seeking to regain momentum.
