lululemon athletica inc. (LULU)

lululemon reported second-quarter revenue of $2.4 billion on 3 September 2026, down 4 percent from a year earlier 1. Comparable sales, which track stores and online sales open at least a year, fell 12 percent in the Americas 1.

Profit was helped by $134.5 million of refunds of import tariffs, which added 560 basis points to gross margin 1. A basis point is one hundredth of a percentage point 1.

The company expects 2026 revenue of $10.350 billion to $10.500 billion, a decline of 5 to 7 percent 1. FashionUnited notes this lowers its earlier outlook 12.

Heidi O'Neill, formerly of Nike, became chief executive on 8 September 2026, and new product and operations chiefs took up newly created roles on 26 October 45.

The open question is whether this new team can stop the slide in the Americas, where revenue fell 8 percent in the quarter 1.

lululemon opened its first store in Vancouver in 1998 and grew into a designer and seller of technical athletic apparel, footwear and accessories 2.

It made one different bet in 2020, buying MIRROR, a home-fitness product sold with digital classes, later renamed lululemon Studio 2.

In 2023 it decided to stop selling the hardware, named Peloton the exclusive content provider for existing subscribers, and stopped new sales in December 2023 2.

Revenue kept climbing, from $9.62 billion in the year ended 28 January 2024 to $10.59 billion the next year and $11.10 billion in the year ended 1 February 2026 2.

On 10 September 2024 it took over the Mexico stores and operations that a third-party licensee had run 2.

In fiscal 2025 revenue grew 5 percent to $11.1 billion 2. China Mainland rose 29 percent while the Americas fell 1 percent 2.

Operating margin fell 380 basis points to 19.9 percent, and diluted earnings per share were $13.26 against $14.64 a year earlier 2.

The company blames higher U.S. tariffs and the end of the de minimis rule, which had let low-value parcels in without duty 2. It put the hit to gross profit at about $275 million before offsetting actions 2.

In the Americas the annual report cites lower store traffic, conversion and order value 2. On 29 December 2025 founder Chip Wilson gave notice that he would nominate three directors 2.

Retail Gazette reported that chief executive Calvin McDonald left at the end of January after almost eight years, with Meghan Frank and André Maestrini serving as interim co-chief executives 10.

The board then named Heidi O'Neill, who spent more than 25 years at Nike 10.

What it sells

lululemon sells technical athletic apparel, footwear and accessories under one brand, for yoga, running, training and most other activities 2.

In fiscal 2025 women's wear made up 63 percent of revenue, men's 24 percent and accessories and other categories 13 percent 2.

The company calls men's a key pillar of its growth plans 2. New styles include Daydrift, Be Calm, Big Cozy and Mile Maker, and it is reviving Scuba, Dance Studio and ABC 2.

Where it sells

It ran 825 company-operated stores at the end of the second quarter after opening nine net new ones 1.

In fiscal 2025 the Americas gave 71 percent of revenue, China Mainland 16 percent and the rest of the world 13 percent 2.

Company-operated store revenue rose 1 percent that year and online revenue 8 percent 2. Partners also ran 45 licensed stores, mostly in the Middle East 2.

Suppliers and sites

lululemon owns no factories 2. It works with about 51 vendors, five of which made 47 percent of its products in 2025, and 40 percent of products came from Vietnam 2.

It owns a distribution centre of 605,000 square feet in Groveport, Ohio, and a Vancouver head office of 140,000 square feet 2.

People

Heidi O'Neill has been chief executive since 8 September 2026 and joined the board the same day 4.

Meghan Frank stays chief financial officer and has interim oversight of global brand and technology until permanent heads are named 5.

Effective 26 October 2026 Maggie Gauger, from Athleta, became president and chief product officer, and Joseph Godsey, from Walmart Canada, became chief operating officer 5.

Nikki Neuburger and Ted Dagnese, the chief brand and product activation and chief supply chain officers, depart on 6 November 2026 5.

Retail Gazette reported that the board was refreshed with former Levi Strauss chief executive Chip Bergh and former Unilever executive Esi Eggleston Bracey 13.

On 19 October 2026 the board added Tara Poseley, a former lululemon product chief, and grew from twelve to thirteen members 6.

The annual report counts about 39,000 employees as of 1 February 2026 2.

Rivals and problems

Retail Gazette names Alo Yoga and Vuori as growing activewear rivals 10. The annual report says it competes with global, regional and country-specific sellers of athletic apparel and footwear 2.

The company paid $230 million of tariffs under a law the U.S. Supreme Court struck down, filed refund claims and received $134.5 million in the second quarter 3. More refunds remain uncertain 3.

A consumer class action filed on 27 March 2026 in a Michigan federal court alleges tariff-related pricing, and the company intends to defend it 3.

Six shareholder derivative suits have been filed in New York federal court since 4 November 2024 2.

The umbrella, in words

Everything it sells is marketed under the single lululemon brand 2.

Its subsidiaries exhibit lists only significant subsidiaries as of 1 February 2026 8. They include lululemon usa in Nevada, lululemon athletica canada in British Columbia and Curiouser Products Inc., which does business as MIRROR 8.

It also lists units in Mexico, China, Australia, Japan, Korea, India and across Europe, each carrying the local store or trading business 8.

It agreed a cooperation agreement on 26 May 2026 with founder Chip Wilson and his affiliates, giving him two board nominees and standstill terms 7.

Retail Dive reported that Wilson, who owns about 8.7 percent, agreed to standstill, non-disparagement and voting terms for about 18 months 11.

The proxy statement shows Dennis Wilson owning 9,904,856 shares, 8.7 percent, as of 30 April 2026, per a Schedule 13D/A of 8 May 2026 9.

It lists BlackRock with 9,153,642 shares, 8.0 percent, from a Schedule 13G/A of 26 January 2024 9. Vanguard Capital Management has 7,985,349 shares, 7.0 percent, per a Schedule 13G of 28 April 2026 9.

G1 Execution Services holds 6,487,961 shares, 5.7 percent, per a Schedule 13G of 13 November 2025 9. Directors and officers as a group held 254,943 shares, under 1 percent 9.

For the third quarter of 2026 the company expects revenue of $2.290 billion to $2.320 billion, a decline of 10 to 11 percent 1. It expects diluted earnings per share of $0.93 to $0.98 1.

For 2026 it expects earnings per share of $9.48 to $9.73, which includes $0.86 from tariff refunds 1. The outlook does not reflect further refunds or repurchases 1.

The company says its Americas plan rests on three pillars: product creation, product activation and enterprise efficiency 2. The 10-Q adds a plan to rely more on full-price selling 3.

It expects the most company-operated store openings in 2026 to be in China Mainland 2. A leased Brampton distribution centre is expected to be operating in fiscal 2026 2.

O'Neill said her focus would be on accelerating product breakthroughs, deepening the brand's cultural relevance and unlocking international growth 10.

Under the cooperation agreement the company will put a proposal to fully declassify the board to holders at the 2027 annual meeting, with yearly elections from the 2028 meeting 7.

At the 25 June 2026 meeting holders voted 73,105,842 for and 320,258 against declassifying the board 14.