TLDRShares of LULU plummeted as much as 20% during premarket trading Friday following disappointing Q2 financial resultsSecond quarter revenue totaled $2.4 billion, falling short of analyst projections of $2.458 billion, marking a 4% year-over-year decreaseComparable store sales declined 9%, significantly worse than the anticipated 4.6% drop forecasted by Wall StreetThe athleisure retailer reduced its annual revenue forecast to $10.35B-$10.5B, representing a 5%-7% decrease compared to the previous yearNew CEO Heidi O’Neill assumes leadership next week, facing challenges as the brand loses market share to competitors including Alo and VuoriShares of Lululemon experienced a significant selloff Friday following the athletic apparel company’s announcement of underwhelming second quarter performance and its second reduction of annual guidance this fiscal year.Lululemon Athletica Inc., LULUShares declined to approximately $100.89 during morning trading, representing a roughly 17% decrease, after plunging as much as 20% before the opening bell. This positions the stock for one of its most severe single-session declines since March 2020.Second quarter revenue reached $2.4 billion, falling below analyst consensus of $2.458 billion and declining from $2.525 billion in the year-ago period. Comparable store sales contracted 9% throughout the quarter, substantially exceeding the 4.6% decrease Wall Street had anticipated.If you’re a Lululemon investor, or considering buying today after it’s being down 20% this morning. You have to read this first.Not because it’s cheap it’s a buy… as 2Q Revenue Miss offset by Int’l Slip LULU posted 2Q adj. EPS of $2.92, or $2.06 past the $0.86 tariff clawback,… https://t.co/XMPPk210wf pic.twitter.com/In0VHZO6YV— Nicholas Mugalli (@RealNickMugalli) September 4, 2026While adjusted earnings of $2.92 per share surpassed the $1.79 consensus estimate, this figure incorporated 86 cents per share attributed to federal tariff reimbursements. Jefferies analyst Randal Konik noted this makes the actual earnings capacity “materially worse than the headline.”Annual Outlook Reduced for Second TimeLululemon lowered its annual revenue projection to between $10.35 billion and $10.5 billion, signaling a 5% to 7% contraction from the prior year. This marks a significant reduction from previous guidance ranging from $11 billion to $11.15 billion.Adjusted earnings per share for the full year are now anticipated to land between $9.48 and $9.73, considerably beneath earlier guidance of $10.95 to $11.15. Both forecasts fell short of analyst expectations.Konik characterized the quarter as a “triple whammy,” highlighting declining sales across U.S. retail locations, women’s apparel including a 20% plunge in leggings revenue, and China performance on a constant-currency basis.Citi analyst Paul Lejuez stated there “weren’t really any significant positives” throughout the quarter, noting the company is grappling with both customer traffic and conversion challenges across multiple regions.Incoming CEO Faces Significant ChallengesFormer Nike executive Heidi O’Neill is scheduled to assume the CEO role next week, inheriting a brand struggling against competitors like Alo and Vuori while confronting product quality concerns.Konik suggested O’Neill has “a mountain to climb,” with brand momentum “fading fast and share losses mounting.” He partially attributes the margin pressure to strategic decisions by outgoing CEO Calvin McDonald, who pursued expansion into larger, costlier retail spaces that elevated fixed operating expenses.Morningstar analyst David Swartz told Yahoo Finance the revised guidance represents a prudent strategic move. “There’s no reason to put out numbers that are going to be too aggressive and hard to hit,” he explained. He emphasized the company maintains zero debt, clarifying the primary concern centers on revenue growth rather than financial stability.The lowered guidance does establish more achievable targets for O’Neill. However, Lejuez warned that “another cut is also possible once she starts.”LULU shares have declined more than 40% year-to-date. The stock also experienced a selloff in April when O’Neill’s appointment was initially announced.In May, Lululemon finalized a settlement agreement with founder Chip Wilson, resolving a proxy dispute concerning board governance, with O’Neill’s appointment representing one of the contentious issues.The post Lululemon (LULU) Stock Plunges 17% Following Disappointing Q2 Results and Revenue Forecast Reduction appeared first on Blockonomi.