Quick Facts

• Lululemon trimmed full-year revenue guidance to $11-$11.15 billion, down from $11.35-$11.50 billion
• Q1 2026 operating income fell 37% to $276.9 million as gross margin contracted to 54.2%
• Former Nike executive Heidi O’Neill starts as CEO in September after proxy battle with founder ends

Lululemon cut its financial outlook for 2026 as the athletic apparel company struggles with slowing sales in North America and product launches that failed to resonate with customers.

The company now expects full-year revenue between $11 billion and $11.15 billion, down from a previous range of $11.35 billion to $11.50 billion. Earnings per share guidance dropped to $10.95-$11.15, well below the previous range of $12.10-$12.30.

First-quarter revenue rose 4% to $2.5 billion, but operating income plunged 37% to $276.9 million. North American comparable sales fell 6%, with U.S. revenue down 4% in constant currency.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top line performance,” interim co-CEO Meghan Frank told investors. “Not all of our product launches have met our expectations.”

The weak results add pressure as former Nike executive Heidi O’Neill prepares to take over as CEO on September 8. O’Neill spent 25 years at Nike, helping scale that business from $9 billion to $45 billion in sales.

Lululemon faces increased competition from brands like Alo Yoga and Vuori in its core North American market. The company’s China business provided a bright spot, with revenue rising 30% to $478.4 million.

The guidance cut comes after Lululemon settled a proxy battle with founder Chip Wilson in May. The agreement added two of Wilson’s board nominees while requiring him to refrain from public criticism for 18 months.

Shares fell 10.9% in after-hours trading to $111.30. The stock is down 39% year-to-date through Tuesday’s close.

Read more: Lululemon Trims Outlook, Adding Pressure Ahead of New CEO