Description

Lululemon Athletica’s $10.5 Billion Reset — Can North America Recover?

Lululemon Athletica Inc. reported second-quarter 2026 results reflecting pressure in North America and China Mainland while continuing to invest for long-term growth. Net revenue declined 4%, or 5% in constant currency, to $2.4 billion, while comparable sales fell 10%. North America revenue decreased 8%, with comparable sales down 12%. U.S. sales fell 8%, while Canada declined 11%, or 9% in constant currency. China Mainland revenue increased 4% on a reported basis but declined 2% in constant currency, with sales down 8% amid negative brand sentiment and weaker product response. Rest of World revenue increased 5%, or 6% in constant currency, although comparable sales declined 3%. Gross margin expanded 200 basis points to 60.5%, supported primarily by a $134.5 million pretax refund of IEEPA tariffs. This was partly offset by tariffs, markdowns increasing 70 basis points, and fixed-cost deleverage related to new stores and distribution network investments.