Lululemon shares tumble on weak China, North America sales

Lululemon shares tumble on weak China, North America sales

Lululemon Athletica Inc ( NASDAQ:LULU ) View Price & Profile Lululemon shares tumble on weak China, North America sales Published: 10:04 04 Sep 2026 EDT Lululemon Athletica Inc (NASDAQ:LULU) shares fell 17% in early Friday trading after the athletic apparel retailer reported weaker comparable sales and cut its full-year guidance. Second-quarter revenue was $2.4 billion, down 4% year-over-year and below the $2.46 billion estimate, with comparable sales down 9%. EPS of $2.92 included a $0.86 tariff-refund benefit. Gross margin rose 200 basis points to 60.5%, boosted by $134.5 million in tariff refunds. Operating income of $453.7 million beat estimates but fell 13% year-over-year, and operating margin contracted 190 basis points to 18.8%. For fiscal 2026, Lululemon now guides revenue of $10.35 billion to $10.5 billion, versus an $11.04 billion estimate, and EPS of $9.48 to $9.73, versus $10.88 estimated. Third-quarter guidance of $2.29 billion to $2.32 billion in revenue and $0.93 to $0.98 in EPS also came in well below Street estimates. Bank of America said the reset leaves no clear line of sight to an inflection point, citing a second-quarter miss in China and continued weakness in North America. The bank kept its Neutral rating, cut EPS estimates, and lowered its price objective to $122 from $140, while noting incoming CEO Heidi O'Neill, who starts next week, could signal a strategy shift on the next earnings call. China Mainland comps fell 8%, well short of guidance, hurt by weak traffic tied to social media backlash over a Great Wall marketing event and a soft Tmall 618 event. North America comps dropped 12%, with leggings sales down 20% as shoppers shift toward away-from-body silhouettes. Bank of America expects North American trends to worsen in the third quarter, partly because continued st...