Lululemon cuts full-year outlook ahead of incoming CEO's arrival

Lululemon has lowered its full-year fiscal 2026 outlook ahead of its new CEO joining in September.

The company now expects 2026 revenue of $11.0 billion to $11.15 billion, down from prior guidance of $11.35 billion to $11.50 billion in revenue, representing a decline of up to 1%.

Meghan Frank, Interim Co-CEO and Chief Financial Officer, said that while the company "experienced a solid start to 2026", it had been "navigating headwinds that have led us to adjust our outlook for the full year".

She added: "We have assessed the business and are taking additional actions to reposition where needed and further strengthen our product engine. We remain confident in our path forward."

The downgrade follows Lululemon's publication of its first-quarter results, ended 3 May, which showed a gross profit decline of 3% to $1.3 billion. Gross margin also dropped to 54.2%, while operating margin fell to 11.2%.

Net revenue for the first quarter ended 3 May rose by 2% to $2.5 billion on a constant-currency basis, yet comparable sales fell 2% on a constant-currency basis.

International comparable sales increased by 8% in constant currency, while Americas comparable sales decreased by 6% on a constant-dollar basis.

That pattern mirrors Lululemon's 2025 full-year results, when international revenue grew by 22% but Americas revenue declined by 1%. Management had, at that point, flagged improving full-price sales in North America as a priority for 2026.

In the latest financial results, Frank explained that its plans for improvements in the North American market "resulted in some positive signals in the quarter, including a sequential improvement in full-price sales."

André Maestrini, Interim Co-CEO, President, and Chief Commercial Officer, commented: "During the quarter, we continued to grow our lululemon community as we entered new markets and elevated our product, brand, and guest experiences around the world.

"This work included delivering successful product capsules and activations across train, tennis, and run, as well as implementing enhancements across our store fleet and digital channels that we will build upon in the months ahead.

"We recognise that we have more work to do, and our teams remain focused on our priorities as we continue our efforts to reignite growth and realise Lululemon's full potential."

The company operated 816 stores at the end of the quarter, up from 770 a year ago, with five net new openings during the period.

The downgraded outlook for 2026 precedes Heidi O'Neill's planned start as Lululemon's new CEO on 8 September.

Lululemon appointed the Nike veteran in April, citing her 26-year career at Nike, during which the company grew from a $9 billion business to more than $45 billion.

O'Neill said at the time of her appointment that her priorities would include accelerating "product breakthroughs" and deepening the brand's "cultural relevance."

Frank and Maestrini will continue to lead as interim co-CEOs until O'Neill joins, at which point both plan to return to their previous senior leadership roles.