Lululemon cuts outlook after quarterly sales and profit decline

Lululemon Athletica Inc. reported a sharp decline in quarterly sales and profits on September 3, 2026, and significantly lowered its financial outlook for the year, underscoring the challenges facing incoming CEO Heidi O'Neill as she prepares to take the helm. The athletic apparel retailer's shares fell approximately 18% in extended trading following the announcement. The company's second-quarter results, which ended August 2, showed net revenue of $2.42 billion, a 4% decrease from the same period last year and below analyst expectations of $2.46 billion. Comparable sales fell 9% globally, with a particularly steep 12% decline in the Americas, its largest market. Sales of leggings, a core product for the brand, dropped about 20%. Net income for the quarter was $329.2 million, down from $370.9 million a year earlier. Executives attributed the weak performance to a combination of factors, including a lack of fresh product, negative social media commentary, and a marketing misstep in China. A campaign on the Great Wall of China that featured a Japanese taiko drum drew criticism and contributed to a 2% revenue decline in the region, which had previously been a growth engine.