- Lululemon athletica appointed Heidi O'Neill as Chief Executive Officer and added her to the Board following an interim period, ending the leadership vacuum left by Calvin McDonald's departure.
- The company adopted extensive bylaw amendments covering shareholder meetings, director eligibility and emergency governance procedures, which it says align with updated regulatory standards and clarify governance contingencies.
- The new CEO inherits the product and brand reset that the Lululemon narrative treats as its key bet, lifting the share of new styles in the assortment from 23% to 35% by Spring 2026 and speeding design and supply chain processes.
- Q2 net revenue fell 4% to $2,415.6 million, with Americas net revenue down 8% and Americas comparable sales down 12% on less traffic, lower conversion and a lower average order value; China Mainland rose 4% and Rest of World rose 5%.
- Reported gross margin rose 200 basis points to 60.5% only because it included a 560 basis point benefit from $134.5 million of IEEPA tariff refunds booked in cost of goods sold; without the refunds gross margin fell about 360 basis points.
- Consensus expects EPS to fall two fiscal years running, down 29.11% in FY27 to $9.40 and another 8.02% in FY28 to $8.65, with a Hold consensus and an average 12-month target of $105.65 against a $102.28 close.
- Guidance anticipates an estimated $210 million reduction in operating income from higher tariffs and the removal of the de minimis exemption.
Quotes
“The company is implementing a significant reset in its product approach, increasing the share of new styles in its assortment from 23% to 35% by Spring 2026, and investing in faster, more agile design and supply chain processes”
“We don’t think the reset is done”
“Headwinds more structural”