Overview
- Lululemon reported first-quarter fiscal 2026 results on Thursday that showed modest revenue growth to about $2.47–$2.5 billion and diluted EPS of $1.69 while net income fell to roughly $195 million.
- Hours after the release the company lowered its full-year revenue guidance to $11.00 billion–$11.15 billion and cut EPS to $10.95–$11.15, prompting roughly a 9–11% drop in after-hours trading.
- Sales were weak in the Americas with comparable sales down and U.S. revenue falling, while international markets led by Mainland China posted strong double-digit growth that helped offset domestic softness.
- Profitability deteriorated sharply as gross margin compressed about 410 basis points and operating income fell about 37% due largely to tariffs, higher markdowns and fixed-cost deleveraging from softer North American sales.
- Management pointed to negative media and social-media commentary and several product launches that underperformed, the company retained about $1.5 billion in cash and continued buybacks, and investors will watch execution under incoming CEO Heidi O’Neill when she starts in September.