LULULEMON Cuts Full-Year Outlook as Comparable Sales Fall 9%
Q2 revenue slipped 4% to $2.4 billion and lululemon now sees full-year revenue declining 5% to 7%, with Q3 sales set to drop as much as 11%.
lululemon athletica (LULU) reported second-quarter fiscal 2026 results on September 3, 2026, showing net revenue down 4% to $2.4 billion and comparable sales down 9% — or 10% on a constant dollar basis. The company also lowered its full-year outlook, now guiding to net revenue of $10.35 billion to $10.50 billion, a decline of 5% to 7%, with diluted earnings per share of $9.48 to $9.73.
The weakness was concentrated in the home market. Americas net revenue fell 8% and Americas comparable sales fell 12%, while international revenue rose 4% (2% in constant dollars) even as international comps slipped 3%. The quarter ended on August 2, 2026.
Reported profitability was flattered by a one-time item. Gross margin rose 200 basis points to 60.5%, but that included $134.5 million of IEEPA tariff refunds that added 560 basis points. Operating income fell 13% to $453.7 million and operating margin declined 190 basis points to 18.8%, again including the same 560-basis-point tariff benefit.
Diluted earnings per share came in at $2.92, down from $3.10 a year earlier, and included $0.86 per share from the tariff refunds and $4.1 million of associated interest, net of tax. Selling, general and administrative expenses climbed to 41.7% of revenue from 37.7%. Net income was $329.2 million versus $370.9 million.
Guidance for the current quarter is notably weaker than the reported quarter. For the third quarter, lululemon expects revenue of $2.290 billion to $2.320 billion, a decline of 10% to 11%, and diluted EPS of $0.93 to $0.98, assuming a roughly 30% tax rate. The full-year outlook includes the $0.86 tariff benefit already booked but assumes no further refunds.
Interim Co-CEO and CFO Meghan Frank said the company is taking a prudent approach with our revised full-year outlook, pointing to plans to strengthen product, increase marketing investment and maintain disciplined expense management. Interim Co-CEO André Maestrini said the company looks forward to welcoming incoming CEO Heidi O'Neill next week.
The balance sheet ended the quarter with $1.4 billion in cash and $593.7 million of available revolver capacity. Inventories fell 1% to $1.7 billion, and 7% on a unit basis. The company repurchased 2.7 million shares for $330.0 million and opened nine net new stores, ending with 825 company-operated locations.
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