Lululemon's interim CEO Meghan Frank announced a reduction in the company's fiscal 2026 sales forecast to between $11 billion and $11.15 billion, down from a previous estimate of $11.35 billion to $11.50 billion. This revision comes as the company faces undisclosed 'headwinds' affecting its business outlook.
The stock fell over 7% in after-hours trading, contributing to a nearly 40% decline in value this year. Additionally, Lululemon cut its earnings per share guidance to a range of $10.95 to $11.15, significantly below analyst expectations of $12.30. For the current quarter, the company anticipates sales between $2.45 billion and $2.48 billion, also falling short of the $2.60 billion forecast.
Despite beating expectations in its fiscal first quarter with earnings of $1.69 per share and revenue of $2.47 billion, the overall outlook remains bleak. The company has been restructuring under interim leadership and is awaiting the arrival of new CEO Heidi O'Neill, who is expected to implement strategic changes.
However, concerns persist regarding the time it may take to address product quality and innovation issues, as well as the reliance on discounts that could undermine Lululemon's premium brand image