March 17 (Reuters) – Lululemon forecast 2026 revenue and profit below Wall Street expectations on Tuesday, underscoring its challenges as it faces rising competition and an attempt by founder Chip Wilson to overhaul the board.
Upheaval at the athletic apparel maker follows months of share price weakness and shaky product execution, culminating in CEO Calvin McDonald’s departure in December and a subsequent proxy fight by Wilson, who had nominated three independent directors to the company’s board and called for annual board elections.
Lululemon said on Tuesday it has appointed former Levi Strauss CEO Chip Bergh to its board.
The outlook also signaled a soft start to the year, with slowing momentum in its North American business overshadowing a better-than-expected holiday quarter.
Shares of the company fell about 1% in extended trading. They have declined about 23% so far this year.
Lululemon expects annual revenue to be between $11.35 billion and $11.50 billion, compared with analysts’ average estimate of $11.51 billion, according to data compiled by LSEG.
It forecast annual profit in the range of $12.10 to $12.30 per share, while analysts estimated $12.58.
Once a pioneer of the athleisure category, Lululemon has also lost ground to big sportswear brands like Nike as well as upstarts such as Alo Yoga and Vuori.
For the fourth quarter, the company reported revenue of $3.64 billion, beating the estimate of $3.58 billion. Its quarterly profit per share of $5.01 also topped analysts’ expectations of $4.78.
The company exceeded its January preliminary update as well, supported by a 17% jump in international sales during the holiday quarter.
Gross margin, however, decreased 550 basis points to 54.9% during the quarter as it faces an impact from U.S. import tariffs.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shilpi Majumdar)
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