Lululemon Athletica

A Lululemon executive said the company is increasing marketing investment in the second half of the year. Slower-than-expected top-line trends will require additional seasonal clearance. The Middle East franchise business continues to be impacted by the regional conflict, and European tourism is also affected.

Lululemon reported Q2 revenue of $2.4B, below estimates, and comparable sales fell 9%. The company issued a sharply lower FY26 and Q3 outlook, sending shares down over 15% in after-hours trading.

On its earnings call, Lululemon's management said the Q2 slowdown in leggings and bags was worse than anticipated and that the response in the second half has been weaker than expected. The statement suggests ongoing demand challenges in the retailer's core categories.