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Lululemon shares plunge as earnings guidance falls well short of estimates
Sign at the entrance to the Lululemon store in Midtown Manhattan.
Erik Mcgregor | Lightrocket | Getty Images
Lululemon shares plunged in extended trading Thursday after the company gave a much worse than expected full-year outlook.
The company topped second-quarter earnings estimates but slightly missed revenue expectations. But it said it expected tariffs to hit its full-year profits by $240 million.
Lululemon said it expects full fiscal year earnings of $12.77 to $12.97 per share, well below Wall Street estimates of $14.45 per share. It also anticipates full-year revenue of $10.85 billion to $11 billion, compared with Wall Street expectations of $11.18 billion.
“We are facing yet another shift today within the industry related to tariffs and the cost of doing business,” CEO Calvin McDonald said on a call with analysts. “The increased rates and removal of the de minimis provisions have played a large part in our guidance reduction for the year.”
Here’s how the company did for its second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $3.10 vs. $2.88 expected
- Revenue: $2.53 billion vs. $2.54 billion expected
Shares of the company sank more than 12% after the bell Thursday. The stock is down more than 45% this year.
Programming note: Lululemon CEO Calvin McDonald will be interviewed exclusively on CNBC’s “Squawk on the Street” on Friday.
The company reported second-quarter net income of $370.9 million, or $3.10 per share, compared to $392.92 million, or $3.15 per share, in the year-ago period. Gross margin decreased 1.1 percentage points to 58.5%, and operating margin decreased 210 basis points to 20.7%.
CFO Meghan Frank said on the call that the removal of the de minimis exemption, which excluded some smaller shipments from tariffs, will significantly affect the company, representing roughly 1.7 percentage points of the 2.2 percentage point tariff-related decline in profit expected for the year.
Same-store sales in the Americas were down 4%. Overall comparable sales increased just 1% compared to Wall Street estimates of 2.2%. Lululemon said it added 14 net new stores during the second quarter, bringing its total to 784 stores.
“My view is that it’s now time to reset many of our practices related to how we develop and create the range of products that will fuel the next phase of our growth,” McDonald said on Thursday. “We have seen that when we get our product right, everything else can follow.”
Lululemon projects third-quarter revenues will be between $2.47 billion and $2.50 billion compared to Wall Street estimates of $2.57 billion. The company said it expects earnings per share in the next quarter to be between $2.18 and $2.23 per share, compared to an estimate of $2.93 per share.
McDonald said on the Thursday call that he believes the company has let its product lifecycles “run too long,” particularly in its lounge and social categories.
“We have become too predictable within our casual offerings and missed opportunities to create new trends,” he said, identifying those issues as the “root causes” of the company’s product challenges in the U.S.
“Our lounge and social product offerings have become stale and have not been resonating with guests,” McDonald added.
To regain its U.S. momentum, McDonald said the company plans to increase its new styles from 23% of its overall assortment to 35% next spring and improve its fast-track design capabilities. He said Lululemon will not make any short-term decisions that “could hurt or damage” the brand in the long-term.
“We are not satisfied with the results for the quarter, and we know our brand can and will perform better than these results,” McDonald said.
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Gold is sold at a discount in Dubai due to Middle East conflict disrupting flights. Traders offer up to $30 per ounce less than London prices.
Dubai Gold Selling Cheaper As Iran War Grounds Flights
Gold is being sold at a discount in Dubai as the widening conflict in the Middle East disrupts flights and hampers the movement of bullion from one of the world’s key trading hubs.
According to a Bloomberg report, traders in Dubai are offering discounts of up to $30 per ounce compared to the global benchmark price in London. The unusual price cut comes as shipments remain stranded due to flight disruptions triggered by the escalating conflict involving Iran and Israel.
Dubai is a key global centre for refining and exporting gold to markets across Asia, including India. However, partial airspace restrictions and heightened security risks have slowed the movement of bullion out of the region.
Why Gold Is Being Sold Cheaper
Gold is typically transported in the cargo holds of passenger aircraft. With several flights from the UAE restricted amid regional tensions, traders are struggling to move bullion to international markets.
At the same time, insurance and freight costs have surged, making shipments more expensive and uncertain. Many buyers have therefore stepped back from placing new orders, unwilling to bear high logistics costs without assurance of timely delivery.
To avoid paying prolonged storage and financing costs while shipments remain stuck, some traders are offering gold at discounted prices.
Although transporting bullion by road to airports in neighbouring countries such as Saudi Arabia or Oman is theoretically possible, logistics firms are reluctant due to the risks and complications of moving high-value cargo across land borders during a conflict.
What It Means For India
India, one of the largest buyers of gold shipped from Dubai, could face short-term supply disruptions if the situation continues.
Renisha Chainani, head of research at Augmont Enterprises Ltd., said several cargo shipments have already been delayed, creating temporary tightness in the availability of physical bullion in India.
However, industry experts as reported by Bloomberg say the immediate impact may remain limited as domestic inventories are currently comfortable after heavy imports earlier this year.
Chirag Sheth, principal consultant for South Asia at Metals Focus, said Bloomberg that India has ample stocks for now, but warned that prolonged disruptions could eventually affect supply if the conflict continues for several months.
Meanwhile, global gold prices have surged this year amid geopolitical uncertainty, with spot gold recently trading above $5,000 per ounce.
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March 08, 2026, 10:03 IST
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Some seven in 10 British adults without a full driving licence say learning to drive is currently unaffordable, according to a survey.
The figure is even higher among younger people, with 76% of 18 to 29-year-olds without a licence saying driving lessons are financially out of reach, the poll for car insurer Prima found.
Overall, 38% said the cost of driving lessons was the biggest deterrent to learning to drive.
Some 32% were put off by the price of buying a car and 15% said the cost of car insurance was the main barrier to learning to drive.
Almost half (45%) said they would consider learning to drive if it became significantly cheaper.
Nick Ielpo, UK country manager at Prima, said: “For a growing number of people, driving is no longer a symbol of freedom – it’s a financial stretch too far.
“Between lessons, buying a car and insuring it, the upfront and ongoing costs are pricing many people out before they even start.”
Find Out Now surveyed 1,134 adults who do not hold a full driving licence between January 21 and 23.
Go Digit General Insurance on Saturday said it has received a demand notice of about Rs 170 crore for short payment of goods and services tax (GST) for nearly five years. The company has received an order copy from the Office of the Commissioner of GST & Central Excise, Chennai South Commissionerate on March 6, confirming GST demand of Rs 154.80 crore levying penalty of Rs 15.48 crore and Interest u/s 50 of CGST Act, 2017 for the period July 2017 to March 2022, the insurer said in a regulatory filing. The company is in the process of evaluating the legal advice on the implications and would file an appeal, it said.
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