Lululemon Issues Weak Q3, Full-Year Outlook After Revenue Drop

Lululemon athletica issued a significantly weaker-than-expected outlook for the third quarter and the full year on Thursday, sending its stock higher in after-hours trading despite the company reporting a sharp decline in quarterly revenue and a drop in net income. The athletic apparel maker’s guidance fell far short of Wall Street estimates, reinforcing concerns about slowing demand and intensifying competition in its core North American market. The company reported second-quarter results for the period ending August 3, 2026, showing revenue of $2.42 billion, a 4.3% decrease from the same quarter last year. Net income fell to $329.2 million from $370.9 million in the prior-year period. Diluted earnings per share came in at $2.92, which beat the consensus estimate of $1.79. However, the company noted that a $134.5 million tariff refund boosted quarterly EPS by $0.86 after tax, making underlying earnings quality less favorable. The most significant concern for investors was the company’s forward guidance. For the third quarter of 2026, Lululemon provided earnings per share guidance of $0.93 to $0.98, compared to the consensus estimate of $2.52.