Lululemon’s stock fell 20% on Friday after reporting a weak second quarter and reducing its yearly outlook.
In Q2, the company’s revenue hit $2.42 billion vs. $2.46 billion expected.
Lululemon reported a 4% drop in revenue and a 9% decline in comparable sales.
André Maestrini, Interim Co-CEO, President, and Chief Commercial Officer, stated in the earnings release: “We remain confident in our ability to take the right steps to strengthen our performance and deliver sustainable growth over time. I would like to thank our teams around the world for their focused efforts and continued commitment to lululemon. We look forward to welcoming our incoming CEO, Heidi O’Neill, next week as we begin an exciting new chapter for the company.”
Moving forward, Lululemon projects third-quarter revenue of $2.29 billion to $2.32 billion, down 10% to 11% from the previous year. The company also forecasts earnings of 93 cents to 98 cents per share during this period.
The company anticipates full-year net revenue of $10.35 billion to $10.5 billion, down 5% to 7% from earlier guidance of $11 billion to $11.15 billion.
Lululemon expects earnings per share to be between $9.48 and $9.73, down from the previous estimate of $10.95 to $11.15.
Interim CEO Meghan Frank stated during a call with analysts that social media “negative commentary” impacted the company’s second-quarter performance. Additionally, some of its main categories, such as leggings, faced a slowdown that was worse than expected.
“While we are seeing good guest reaction to our activations and some of our newer styles, the overall response to our product launches remains inconsistent, and we’ve continued to see pressure on the brand in both of our largest markets,” Frank said. “We know there is much more work to be done. Our management team leaders and employees are focused on serving our guests and executing initiatives to drive an inflection in our business.”
Lululemon noted that this latest updated outlook includes an increase from tariff refunds.
By CEO NA Editorial Staff
