Lululemon cuts annual forecasts amid slowing US demand

Lululemon Athletica Inc. announced on Thursday a reduction in its annual revenue and profit forecasts, attributing the revised outlook to slowing demand and increased competition in the U.S. market. The athletic apparel company's shares fell approximately 9% in extended trading following the announcement. The company now anticipates its fiscal year 2026 revenue to remain flat or decline by up to 1%, a significant downward revision from its previous projection of a 2% to 4% increase. Furthermore, Lululemon expects its full-year earnings per share to range between $10.95 and $11.15, down from the earlier forecast of $12.10 to $12.30. First-quarter revenue in the U.S. fell 4% in constant dollars, compared with a 2% increase a year ago, while China revenue rose 23%. Lululemon reported $195 million in net income for the first quarter. Investors are closely watching the transition to new leadership, with incoming CEO Heidi O'Neill set to assume her role in September, amidst efforts to revitalize sales. The company recently concluded a proxy fight with its founder, Chip Wilson, in May, agreeing to give him two board picks in exchange for his pledge to stay quiet for 18 months. Lululemon possesses $1.8 billion in net cash that could be used for investments.