Why Lululemon Stock Crashed Today

Why Lululemon Stock Crashed Today

Joe Tenebruso, The Motley Fool

Sat, September 5, 2026 at 12:55 AM GMT+3 3 min read

• LULU -17.38%
• NVDA +0.84%

Shares of Lululemon Athletica (NASDAQ: LULU) plummeted on Friday after the athletic clothing maker slashed its full-year profit forecast.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Sales shortfall

Lululemon's net revenue declined 4% year over year to $2.4 billion in its fiscal second quarter, which ended on Aug. 2.

The retailer opened 11 new company-operated stores and closed two during the quarter, bringing its total to 825 locations.

Yet its comparable sales, which measure revenue at stores and direct-to-consumer e-commerce sites open for at least a year, fell 9%.

Shifting trends

To the heartbreak of many, Lululemon's famed leggings appear to be going out of style.

"We remain committed to the category, but there are shifts occurring with guests looking for away-from-body silhouettes," interim co-CEO Meghan Frank said during a conference call with analysts.

Worse still, Lululemon is losing market share to rivals like Alo Yoga, according to retail intelligence provider PassBy.

In all, Lululemon's leggings sales sank roughly 20% in the second quarter.

Lululemon's operating income, in turn, dropped 13% to $453.7 million. The decline would have been even steeper if not for $134.5 million in tariff refunds.

All told, the beleaguered company's earnings per share, which were propped up by stock buybacks, decreased 6% to $2.92.

Turnaround efforts are likely to take time

Management sees more declines ahead. Lululemon expects its third-quarter net revenue to shrink by more than 10% to $2.3 billion.

Investors were also disheartened to see Lululemon cut its full-year earnings per share guidance to $9.48 to $9.73, down from a prior forecast of $10.95 to $11.15.

Incoming CEO Heidi O'Neill, a former Nike executive, will be facing quite a challenge when she takes the helm of the struggling apparel designer on Sept. 8.

Should you buy stock in Lululemon Athletica Inc. right now?

Before you buy stock in Lululemon Athletica Inc., consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $445,833!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,402,153!*

Now, it's worth noting Stock Advisor's total average return is 993% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of September 4, 2026.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.

Why Lululemon Stock Crashed Today was originally published by The Motley Fool