Lululemon Shares Plunge 18% to Eight-Year Low After Third Outlook Revision

Nasdaq-listed Lululemon Athletica (LULU) dived 18% in extended trading on September 3, slipping below $100. The decline came after the company issued its third 2026 guidance reduction of the year, which outweighed a better-than-expected profit.

The slide left the stock at an approximately eight-year low, beneath its previous 52-week trough. At current levels, LULU is roughly 80% below the record $511.29 reached in December 2023.

Lululemon Slashes Outlook for Third Time This Year

Lululemon has trimmed its full-year projections three times since March. Each reduction followed a quarter that outperformed on earnings but underwhelmed on sales.

In March, the company forecast revenue of $11.35 billion to $11.50 billion. That was lowered to $11.00 billion to $11.15 billion in June. The latest September projection sits at $10.35 billion to $10.50 billion.

Revenue in the second quarter declined 4% from a year earlier to $2.42 billion, below expectations. Same-store sales fell 10% worldwide and 12% in North America.

Challenges Mount for Lululemon

The string of outlook reductions has come during a stormy period for the company. Founder Chip Wilson initiated a proxy battle with the board, and ex-CEO Calvin McDonald left in January.

A May event at the Great Wall of China backfired after a drum was misidentified as a Japanese instrument, drawing criticism. Competitors Alo Yoga and Vuori have kept chipping away at Lululemon's North American market share.

Meghan Frank, serving as interim co-CEO and CFO, cited reputational harm as one reason for the recent downturn.

“We faced negative commentary in the media and social channels, which impacted traffic and softer than planned response to some new product launches.”

— Meghan Frank, interim co-CEO and CFO of Lululemon Athletica

Heidi O’Neill is set to begin as CEO next week, taking over a recovery strategy that has not yet produced improvements. The company forecast third-quarter revenue to fall 10% to 11% from a year earlier.