Lululemon cuts annual outlook, citing 'negative' media commentary and disappointing product launches
The athletic apparel retailer lowered its full-year guidance and issued a weak current-quarter outlook on Thursday as interim CEO Meghan Frank blamed "negative commentary in the media" and recent product launches that failed to wow shoppers. "We experienced spikes of negative co
The athletic apparel retailer lowered its full-year guidance and issued a weak current-quarter outlook on Thursday as interim CEO Meghan Frank blamed "negative commentary in the media" and recent product launches that failed to wow shoppers.
"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," Frank told analysts during the company's earnings call while explaining why the company's performance declined at the end of its fiscal first quarter. "And second, not all of our product launches have met our expectations. While we've had several successful launches so far this year, we've seen others as we start Q2 not generate the anticipated guest response."
When pressed on what specific negative commentary led to a decline in sales, Frank pointed to Lululemon's proxy contest with founder Chip Wilson, who was outspoken in his criticism of the brand, as well as "questions about the composition" of some of its products.
"These stories have died down and subsided," said Frank. "But we have not yet seen a return to our pre-disruption ... trends."
She said the company is "not sitting still" and is "moving with urgency to make the necessary adjustments to reaccelerate momentum, particularly in North America."
The company's shares dropped 11% in extended trading following the report. Lululemon's stock has plunged about 40% this year as of Thursday's close.
Lululemon is now expecting fiscal 2026 sales to be between $11 billion and $11.15 billion, down from a previous range of between $11.35 billion and $11.50 billion. Analysts were expecting full-year sales of $11.48 billion, according to LSEG.
Lululemon also cut its earnings guidance by more than $1 per share. It's now expecting earnings per share to be between $10.95 and $11.15 for the year, down from a previous range of $12.10 to $12.30. Analysts were expecting $12.30 per share, according to LSEG.
