Lululemon Slashes Full-Year Forecast a Second Time as Revenue Falls 4%, Stock Hits 8-Year Low

Lululemon Athletica cut its full-year revenue outlook for a second consecutive time after reporting a 4% decline in second-quarter fiscal 2026 revenue and a 9% drop in comparable sales, sending shares down roughly 18% in premarket trading on Friday to their lowest level in eight years. The company now expects full-year net revenue of $10.35 billion to $10.5 billion, representing a 5% to 7% decline, sharply below the prior guidance of $11 billion to $11.15 billion, which itself had already been reduced from an earlier target of $11.35 billion to $11.50 billion. Full-year earnings per share guidance was also slashed to $10.95 to $11.15, down from the previous range of $12.10 to $12.30.

Interim CEO Meghan Frank attributed the deterioration to "negative commentary in the media and on social channels" that hurt brand traffic, alongside product launches that failed to resonate with shoppers. China, once a key growth engine, is now showing signs of strain and adding to the pressure already coming from weakening North American demand. Jefferies described the quarter as a "Triple Whammy" of macro weakness, brand headwinds, and product missteps.

The results set a daunting backdrop for incoming CEO Heidi O'Neill, who will inherit a business grappling with intensifying U.S. competition, a stumbling China expansion, and an eroding consumer perception of the brand. Multiple Wall Street analysts cut their price targets in response: UBS lowered its target to $106, while Wells Fargo, Morgan Stanley, Bernstein, Stifel, KeyBanc, and Needham all reduced estimates, with most citing worsening demand and product challenges. Guggenheim reiterated its rating amid ongoing sales concerns.

Contra the bearish consensus, investor Michael Burry declared Lululemon his "largest position," called the stock a "trickster," and said he plans to buy aggressively below $100, signaling confidence in a long-term recovery even as near-term fundamentals deteriorate. The second-quarter top line, while down 4%, did come in ahead of analyst estimates, offering a narrow silver lining in an otherwise bruising report.