Lululemon Stock Plunges on Weak Outlook, Board Shakeup

The athletic apparel retailer projects 2026 revenue between $11.35 billion and $11.50 billion, and diluted EPS in the $12.10 to $12.30 range, both below analyst consensus. This guidance comes amidst a period of significant internal and external challenges, including an ongoing CEO search following Calvin McDonald's announced departure, and a proxy fight initiated by founder Chip Wilson.

The company is also grappling with increased competition from brands like Nike, Alo Yoga, and Vuori, alongside a struggling North America business which saw a 4% revenue slip in Q4, contrasting with a 17% international jump. Profitability also declined, with gross margin dropping 550 basis points to 54.9%, partly due to U.S. import tariffs.

In an apparent move to signal stability, Lululemon appointed former Levi Strauss CEO Chip Bergh to its board, with current chair Marti Morfitt highlighting his industry leadership. However, investors remain concerned about style longevity, quality issues, and a growing reliance on markdowns, contributing to the stock's year-to-date decline of 23% and a 52% drop over the past year, nearing a six-year low.