lululemon Revenue Drops 4% Amid Weak Americas Demand
Event summary
- Net revenue declined 4% YoY to $2.4B in Q2 2026, with Americas region down 8% and international up 4%.
- Gross margin improved 200 bps to 60.5% due to $134.5M in tariff refunds.
- Comparable sales fell 9% YoY, with Americas down 12% and international down 3%.
- Company repurchased 2.7M shares for $330M during the quarter.
- Revised full-year revenue guidance now projects a 5-7% decline to $10.35B-$10.5B.
The big picture
lululemon's revenue decline reflects broader challenges in the premium athletic apparel sector, particularly in North America. The company's ability to navigate regional demand disparities while managing costs will be critical as it prepares for leadership transition. With $2.4B in quarterly revenue, the scale of the challenge is significant but not insurmountable for a brand with strong international positioning.
What we're watching
- Regional Strategy
- How lululemon will address the 12% Americas comparable sales decline while sustaining international growth.
- Cost Discipline
- Whether the company can maintain gross margin expansion without tariff refunds supporting the metric.
- Leadership Transition
- The pace at which incoming CEO Heidi O'Neill can stabilize performance after taking over.
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