Overview
- Lululemon, which cut its full-year guidance on Sept. 3, warned that revenue will fall again in Q3 and the stock dropped about 17–18% to a 52‑week low below $100.
- The company reported weak fiscal Q2 results with roughly $2.4 billion in revenue and comparable sales down about 9–10%, and it trimmed full‑year revenue and EPS guidance to $10.35 billion–$10.5 billion and $9.48–$9.73 respectively.
- Management blamed falling store and online traffic, uneven response to recent product launches, and a roughly 20% decline in women's leggings sales for the shortfall while forecasting a 10%–11% revenue decline in Q3.
- Lululemon retains financial flexibility with nearly $1.4 billion in cash, no debt, and about $330 million of buybacks in Q2 even as hedge fund ownership fell and short interest rose, leaving options for funding a turnaround or returning capital.
- Public responses are split: activist-style buying by investor Michael Burry contrasts with sharp public criticism from Jim Cramer, and the company enters a critical leadership change as Heidi O’Neill prepares to start and must rebuild product momentum, China trust and market share against rivals like Alo, Vuori and Fabletics.