Lululemon Cuts 2026 Outlook as Weak North America Sales Pressure Growth

Lululemon Athletica (NASDAQ: LULU) lowered its full-year fiscal 2026 guidance on Thursday after reporting mixed first-quarter results, causing the company's stock to fall more than 9% in after-hours trading. The revised outlook reflects ongoing challenges in consumer spending and weaker performance in its key North American market.

For the first quarter of fiscal 2026, Lululemon reported earnings per share of $1.69 on revenue of $2.47 billion. The results slightly exceeded Wall Street revenue expectations of $2.44 billion while matching analyst forecasts for earnings.

Comparable sales increased by 1% during the quarter, supported by strong international growth. International comparable sales climbed 13%, highlighting continued demand outside North America. However, comparable sales in the Americas declined 5%, underscoring the pressure facing the company's largest market.

Interim Chief Executive Officer and Chief Financial Officer Meghan Frank stated that the company experienced a sequential improvement in full-price sales within the Americas segment. Despite that progress, broader market conditions and consumer caution have prompted management to take a more conservative approach to future expectations.

Looking ahead, Lululemon forecast second-quarter earnings between $1.76 and $1.81 per share, with revenue expected to range from $2.45 billion to $2.475 billion. Both projections came in below analyst estimates, raising concerns among investors about near-term growth prospects.

The athletic apparel retailer also significantly reduced its full-year fiscal 2026 guidance. Lululemon now expects annual earnings of $10.95 to $11.15 per share and revenue between $11 billion and $11.15 billion. Previously, the company projected earnings of $12.10 to $12.30 per share and revenue of $11.35 billion to $11.50 billion.

Frank said the company is addressing current business challenges by making strategic adjustments and investing further in product innovation. Management remains confident that these initiatives will strengthen long-term performance.

Despite recent financial headwinds, Lululemon has achieved notable milestones in recent months. In April, the company appointed former Nike executive Heidi O’Neill as its next CEO. In May, it also resolved a proxy dispute with founder and major shareholder Chip Wilson by granting him two board nominations.

Following the announcement, Lululemon shares closed at $124.92 before dropping more than 11% in after-hours trading, reflecting investor concerns over the company's reduced earnings and revenue outlook for 2026.