Lululemon Shares Drop 11% Premarket After Cutting Full-Year Guidance, Hitting Lowest Level Since 2018
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Lululemon slashed its full-year revenue and profit outlook, sending shares down 11% pre-market to the lowest level since 2018 — deepening a multi-year slide from its ~$500 peak in late 2023.
How deep are the full-year cuts?
Full-year revenue guidance lowered to $11.0B–$11.15B, down from $11.35B–$11.5B and well below the Street consensus of $11.49B.
Full-year diluted EPS cut to $10.95–$11.15, versus prior guidance of $12.10–$12.30 and consensus of $12.38.
This means → the company lopped roughly 10% off its full-year profit forecast in one go — a signal far more serious than any single-quarter miss.
Why is Q2 guidance even scarier?
Q2 revenue guided at $2.45B–$2.48B; the Street expected $2.6B — a gap of over 4%.
Q2 EPS guided at $1.76–$1.81; consensus sat at $2.69 — cut by nearly a third.
In plain terms = a full-year cut at least leaves room to "make it up in the back half." Q2 guidance tells the market the business is deteriorating right now.
Was Q1 actually good?
Q1 net revenue hit $2.5B, up 4.3% year-over-year, slightly beating the $2.44B estimate — but EPS of $1.69 fell 35% from last year's $2.60.
Gross margin came in at 54.2% and operating margin at 11.2%, both below expectations — profitability is eroding.
Comparable sales rose 1% on a reported basis but fell 2% on a constant-currency basis; the Americas dropped 6%, while international grew 8% — short of the expected +13.2%.
This means → the top-line "beat" is skin-deep. Margins and comp-store sales weakening together suggest growth leaned on markdowns, not full-price selling.
What is Wall Street saying?
Bloomberg Intelligence analyst Poonam Goyal noted Q1 sales topped consensus but trailed historical norms, with markdowns and tariff headwinds persisting.
Barclays' Adrienne Yih held her "equal weight" rating and slashed her target from $161 to $113, citing "traffic trends weakening in late April through May on negative press and product issues."
Piper Sandler's Anna Andreeva kept a "neutral" rating and cut her target from $130 to $110, flagging "declining conversion rates since April" — though she noted the lowered guide still implies EPS improvement in the second half.
Founder truce and incoming CEO — what comes next?
Founder Chip Wilson settled a proxy fight with the board: he gained two board seats and agreed to stop publicly criticizing the company.
Former Nike executive Heidi O'Neill is set to take over as CEO in September, tasked with brand revival, recapturing share, and fixing product cadence.
This reflects a leadership vacuum — the old team is stepping aside, the new team hasn't arrived. Whether the lowered full-year guide is met will be the sole scorecard before the new CEO takes the wheel.
Content is for reference only, not financial advice.