Lululemon shares plunged more than 18% in after-hours trading Thursday after the athletic apparel retailer reported another weak quarter and sharply cut its full-year outlook.
Lululemon stock ended the regular session up 1.42% at $121.77 before falling to around $99.65 after hours. The latest selloff adds to a prolonged decline for the retailer as investors grow concerned about weakening demand, product execution and competition in the athleisure market.
Lululemon Q2 2026 earnings
Revenue fell 4% year over year to $2.42 billion during Lululemon's fiscal second quarter, which was below the $2.46 billion expected by analysts. Comparable sales declined 9%.
The weakness was pronounced in some of Lululemon's core categories. Sales of leggings fell by roughly 20%, according to Reuters. Many see this as clear proof of the growing pressure on one of the company's most important product lines.
Interim CEO Meghan Frank said Lululemon continued to see inconsistent reactions to new product launches. She also pointed to negative social media commentary that affected performance during the quarter.
“We know there is much more work to be done,” Frank said, and added that management is focused on introducing new styles and tightening inventory.
Lululemon reported net income of $329.2 million, or $2.92 per share, compared with $370.9 million, or $3.10 per share, a year earlier. Gross profit slipped 1% to $1.5 billion.
Lululemon Slashes Full-Year Forecast
The biggest concern for investors was Lululemon's updated guidance. The company now expects full-year revenue of between $10.35 billion and $10.5 billion. This is a decline of roughly 5% to 7%, which is sharply below its previous forecast of $11 billion to $11.15 billion.
Lululemon also cut its earnings outlook to between $9.48 and $9.73 per share, down from its previous forecast of $10.95 to $11.15.
(Source: Lululemon)
For the third quarter, revenue is expected to fall about 10% to 11% year over year to between $2.29 billion and $2.32 billion, with earnings of 93 cents to 98 cents per share.
The worsening outlook puts even more pressure on management to revive demand at a time when competitors like Alo Yoga and Vuori are challenging Lululemon's position in premium activewear.