Lululemon cuts annual revenue, profit outlook again a week before new CEO takes over

Lululemon Athletica, a Vancouver-based apparel brand known for its high-priced leggings and athleisure wear, has once again slashed its revenue and profit forecasts just a week before a new CEO arrives. This comes after missing expectations for quarterly sales. The company's shares have plummeted nearly 69% in 2025, and they dipped around 18% in extended trading after the announcement.

Lululemon has faced declining brand appeal, losing market share to newer brands like Alo Yoga and Vuuri within its main market in North America. Although China was a positive for them, their revenue there fell 2%, though it was up 24% a year earlier. The struggles are attributed to broader economic issues and the company's perceived shortcomings in innovation and strategy.

With a new CEO, Heidi O'Neill, set to take over, analysts are keen to see if she can turn the company around. They will be watching for signs of renewed sales momentum and improved performance. Lululemon has revised its forecast for the current fiscal year, now anticipating a drop of 5-7% in revenue and earnings per share of $9.48 to $9.73, down from their previous estimate of flat revenue or a 1% decrease, and $10.95 to $11.15, respectively.

Lululemon reported a revenue of $2.42 billion for the previous quarter, which was less than the average analyst's expectation of $2.46 billion. Their gross margin, however, saw a significant improvement, increasing by 200 basis points to 60.5%, aided by tariff refunds and interest.