Lululemon cuts annual revenue, profit forecast as new CEO prepares to take charge

Lululemon Athletica LULU-Q on Thursday cut its annual revenue and profit forecasts, underscoring the challenges ahead for incoming CEO Heidi O’Neill as she prepares to tackle softening demand and intense competition from newer brands.

Shares of the Vancouver-based apparel brand tumbled about 15 per cent in extended trading. The stock has lost nearly 69 per cent of its value since the beginning of 2025.

Lululemon, known for its high-priced leggings and athleisure wear, has endured several quarters of sluggish sales. As brand appeal wanes, it has ceded ground to newer brands such as Alo Yoga and Vuori in its key North America market.

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Now that Lululemon has managed to put a bruising proxy fight with founder Chip Wilson behind it, investor attention has turned to O’Neill, who is taking the helm next week, for signs the Nike veteran can revive sales and restore momentum.

The company now expects fiscal 2026 revenue to decline 5 per cent to 7 per cent, compared with its prior forecast of revenue remaining flat or declining up to 1 per cent.

It expects fiscal 2026 earnings per share to be between US$9.48 and US$9.73, compared with its prior forecast of US$10.95 to US$11.15.