Lululemon Sees 4% Americas Revenue Drop, Forecasts Second Year of Profit Decline
Lululemon forecasts a second year of profit decline with Americas revenue down 4% in Q4 as competition intensifies, while activist Elliott holds a $1B stake during a CEO search. It posted Q4 EPS of $5.01 on $3.64B revenue but guided Q1 sales to $2.40-2.43B, below forecasts.
1. Profit Outlook and Americas Performance
Lululemon forecasts a second consecutive year of profit decline and reports a 4% drop in Americas revenue in Q4, attributing weakness to intensifying competition from brands such as Alo Yoga and Vuori and increased reliance on markdowns to boost sales.
2. Fourth-Quarter Results and Guidance
The company posted Q4 GAAP EPS of $5.01 and revenue of $3.64 billion, beating estimates, but guided first-quarter sales to $2.40–2.43 billion and full-year EPS to $12.10–12.30, both falling short of analyst expectations and suggesting slower growth ahead.
3. Leadership Search and Investor Activism
With interim co-CEOs Meghan Frank and Andre Maestrini at the helm, Lululemon continues its search for a permanent CEO, added former Levi Strauss chief Chip Bergh to its board and faces pressure from Elliott Investment Management, which holds over $1 billion and is advocating governance and strategic changes.