Lululemon stock declined sharply in premarket trading on Friday following the retailer’s announcement of disappointing second fiscal quarter results and reduced full-year outlook. The company reported revenue that declined 4% and comparable sales that fell 9% for the period, marking another challenging quarter in an ongoing stretch of weak performance.
Interim CEO Meghan Frank attributed some of the downturn to negative social media commentary affecting customer perception, alongside slower-than-anticipated demand in key product categories such as leggings. Frank noted that while certain new product activations and styles had generated positive customer feedback, overall product launch responses remained uneven, and the company continued to face headwinds in its two largest markets.
The retailer significantly reduced its financial projections for the remainder of the year. For the third fiscal quarter, Lululemon guided for revenue between $2.29 billion and $2.32 billion, representing a decline of approximately 10% to 11% compared to the prior year period. Full-year revenue guidance was lowered to a range of $10.35 billion to $10.5 billion, down 5% to 7%, compared to previous guidance of $11 billion to $11.15 billion. Earnings guidance also declined substantially, with the company projecting $9.48 to $9.73 per share for the full year, down from prior guidance of $10.95 to $11.15 per share.
In the second quarter, Lululemon reported net income of $329.2 million, or $2.92 per share, compared to $370.9 million, or $3.10 per share, in the year-ago period. Gross profit decreased 1% to $1.5 billion, though gross margin expanded 5.6%, benefiting from a tariff refund of $134.5 million. Management indicated its focus would shift toward introducing new styles and managing inventory levels more tightly in an effort to return to sales growth. Incoming CEO Heidi O’Neill is scheduled to assume leadership of the company in the coming week.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI