Lululemon slides on weak China and North America sales, trims full-year outlook

Lululemon Athletica Inc. shares fell about 17% after a softer Q2: revenue $2.4 billion (-4% YoY) and comparable sales down 9%, prompting a cut to full-year revenue guidance to $10.35–$10.5 billion and EPS of $9.48–$9.73 (the Q2 EPS was $2.92, aided by a $0.86 tariff-refund benefit). Gross margin rose to 60.5% thanks to tariff refunds, but operating income declined 13% to $453.7 million. Third-quarter guidance of $2.29–$2.32 billion in revenue and $0.93–$0.98 in EPS also came in below expectations. The weakness was driven by China comps down ~8% and North America down ~12% (leggings down ~20%), with analysts like Bank of America noting little clear inflection point yet.