Nasdaq-listed Lululemon Athletica (LULU) stock dropped 18% in after-hours trading on September 3. Shares fell to under $100 after the company’s third guidance cut of 2026 overshadowed a profit beat.
The decline pushed shares to their lowest level in roughly eight years, below the 52-week low. LULU now trades about 80% under its all-time high of $511.29, set in December 2023.
Lululemon’s Third Guidance Cut of the Year
Lululemon has trimmed its full-year outlook three times since March. Each cut followed a quarter that beat earnings estimates but missed on sales.
March guidance called for $11.35 billion to $11.50 billion in revenue. June guidance was cut to $11.00 billion to $11.15 billion. September guidance now stands at $10.35 billion to $10.50 billion.
Second-quarter revenue fell 4% year over year to $2.42 billion, missing forecasts. Comparable sales dropped 10% globally and 12% in North America.
Lululemon Under Pressure
The repeated cuts have coincided with a turbulent year for the brand. Founder Chip Wilson waged a proxy fight against the board, and former chief executive Calvin McDonald departed in January.
In May, a Great Wall of China event featured a drum mistaken for a Japanese instrument, sparking backlash. Rivals Alo Yoga and Vuori have continued to take share in North America.
Interim co-chief executive and chief financial officer Meghan Frank pointed to reputational damage as a factor behind the latest slowdown.
“We faced negative commentary in the media and social channels, which impacted traffic and softer than planned response to some new product launches.”
(Meghan Frank, interim co-CEO and CFO, Lululemon Athletica)
Incoming chief executive Heidi O’Neill starts next week and inherits a turnaround plan that has yet to show results. Lululemon guided third-quarter revenue down 10% to 11% year over year.