Lululemon’s Q2 2026 Earnings Miss Triggers 15% Share Drop and Outlook Cut

Lululemon’s shares fell about 15% after the retailer disclosed a second-quarter revenue decline of 4% and a comparable-sales drop of 9%. The results marked another disappointing period following a guidance reduction in the prior quarter. Analysts linked the sell-off to weaker consumer sentiment and heightened competition in the active-wear segment.

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• Revenue: $2.29 billion to $2.32 billion projected for the third fiscal quarter, representing a 10%-11% year-over-year decline.

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• Full-Year Net Revenue: Forecast at $10.35 billion to $10.5 billion, a 5%-7% decrease from the previous outlook of $11 billion to $11.15 billion.

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• Earnings per Share (EPS): Expected 93 cents to 98 cents for Q3; full-year EPS now projected at $9.48 to $9.73, down from the prior $10.95-$11.15 range.

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• Gross Profit: Down 1% to $1.5 billion, while gross margin rose 5.6% after a tariff refund of $134.5 million.

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Interim CEO Meghan Frank told analysts that “negative commentary” on social media contributed to the quarter’s performance and that the company faced a “greater-than-expected” slowdown in core categories such as leggings. She noted that guest response to newer styles was mixed and that pressure persisted in the retailer’s two largest markets. Frank added that the team is concentrating on new style introductions and tighter inventory management to restore growth.

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For the upcoming quarter, Lululemon expects revenue to fall roughly 10%-11% year-over-year and EPS to stay below $1. The company highlighted a forthcoming boost from tariff refunds as part of its recovery plan. Additionally, the board announced that permanent CEO Heidi O’Neill will assume leadership next week, succeeding founder Chip Wilson’s earlier criticism of the brand’s relevance.

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• “While we are seeing good guest reaction to our activations and some of our newer styles, the overall response to our product launches remains inconsistent, and we've continued to see pressure on the brand in both of our largest markets,” — Meghan Frank, interim CEO

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• “We know there is much more work to be done,” — Meghan Frank, interim CEO

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