Lululemon Plunges 20%, Trades at Lowest Level in 8 Years
Lululemon shares cratered to an eight-year low after the company gutted its full-year outlook, and with a brand new CEO stepping in next week and leggings sales in freefall, the question is whether anyone can stop the bleeding.
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Lululemon (NASDAQ:LULU | LULU Price Prediction) is collapsing on Friday, with shares down roughly 20% to $100.07 after the athleisure retailer slashed its full-year outlook alongside its Q2 FY2026 report. The stock is trading at its lowest level in about eight years and sits down 51.85% year to date.
What Happened
Q2 revenue fell to $2.42 billion, down 4.3% year over year and missing the $2.46 billion consensus. Comparable sales dropped 9% globally, with Americas comps down 12% and leggings sales declining approximately 20%. GAAP EPS of $2.92 topped consensus, but included an $0.86 per share benefit from a $134.5M IEEPA tariff refund.
Guidance Gutted
The real damage came from the cut. Full-year FY2026 revenue guidance was slashed to $10.35B to $10.50B, a decline of 5% to 7%, versus prior guidance for 2% to 4% growth. EPS guidance fell to $9.48 to $9.73 from $12.10 to $12.30. Q3 revenue is guided to contract 10% to 11%. CFO Meghan Frank said the company is “taking a prudent approach with our revised full-year outlook.”
Profit Angle
Incoming CEO Heidi O’Neill starts next week and will conduct a strategic review, per Barron’s. Traders should watch for her turnaround plan, tariff clarity, and holiday traffic data. With Reddit sentiment flipping from bullish (72) to bearish (22) and Q3 operating margin guided to 6.5% versus 17% a year ago, a durable bottom requires evidence that Americas traffic is stabilizing. Until then, upside moves may face resistance.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
