Lululemon Drops as Tariff Refunds Mask Sales Slump

Lululemon’s stock fell about 18% premarket after Q2 revenue of $2.42 billion, down 4% year-over-year and comps down 9%, with diluted EPS of $2.92 vs. $3.10 a year ago. A tariff refund of $134.5 million boosted margins, helping to lift gross and operating margins, but Americas revenue fell 8% while international was up 4%. Operating income declined 13% and margins tightened. Full-year revenue guidance was cut to $10.35–$10.50 billion with EPS guidance of $9.48–$9.73; third-quarter revenue guidance sits at $2.29–$2.32 billion. Incoming CEO Heidi O’Neill is set to start next week.