Lululemon Plunges 12% Premarket on Bleak Profit Forecasts, Deepening Turnaround Doubts
Summary
Lululemon shares dropped 12% in premarket trading after the company issued bleak quarterly and annual profit forecasts. This weak outlook intensifies concerns about slowing U.S. demand, increased competition, and tariff costs, further challenging the company's turnaround efforts. This follows a recent Q1 report showing a 38% drop in net income and significant gross margin compression. The company also noted "negative brand buzz" and an ineffective yoga campaign. Investors will be watching incoming CEO Heidi O'Neill, who takes over in September, to see if she can revive sales.
At the time of this announcement, LULU was trading at $110.36 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $14.9B. The 52-week trading range was $116.63 to $339.15. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Reuters.