A Lululemon store in Toronto in November, 2025.Laura Proctor/The Canadian Press
As it faces pressure to reinvigorate its brand with customers, activewear retailer Lululemon Athletica Inc. LULU-Q is forecasting muted estimates for growth in the year ahead.
The Vancouver-based company reported on Tuesday that in the coming fiscal year, it expects revenue growth of 2 to 4 per cent, driven by its international markets, as North American sales will continue to drop slightly.
Lululemon is in the midst of a search for new leadership, following the departure of chief executive officer Calvin McDonald at the end of January. The company – which helped to popularize the “athleisure” trend that convinced millions of shoppers to wear leggings and other exercise clothing outside of gyms and yoga studios – has seen a troubling slowdown in its U.S. business, and acknowledged that some of its loyal customers have been turned away by the brand’s failure to keep up with trends.
“We know we must improve our performance in North America, while continuing our momentum internationally,” chief financial officer Meghan Frank said during a conference call Tuesday to discuss the company’s fourth-quarter results. Ms. Frank and André Maestrini, chief commercial officer, are serving as interim co-CEOs.
Lululemon reported that sales in the Americas continued to decline in the quarter, with net revenue falling by 5 per cent on a constant-dollar basis. Growth in the international business drove a 1-per-cent increase in total net revenue, to US$3.6-billion in the three months ended Feb. 1. The fourth quarter of the prior year included an extra week; excluding that extra week, net revenue was up 4 per cent on a constant currency basis, according to the company.
Net income fell to US$586.9-million or $5.01 per share, compared to $748.4-million or $6.15 per share in the same period the prior year.
Lululemon has been facing fierce criticism, and pressure for board changes, from founder Chip Wilson – who no longer sits on the board, but remains a major shareholder. Mr. Wilson has accused company leadership of “complacency,” and said the brand has “lost its edge.”
As the CEO search continues, Lululemon is working to refresh its product styles, and to reduce development and design timelines so that new items will hit store shelves more quickly.
The company is hoping these changes will help it to cut down on the number of products it is forced to mark down – particularly in North America, where Lululemon has been unable to sell as much of its merchandise at full price as it has historically.
Compared to 2025, when 23 per cent of the products were new launches, the company is targeting 35 per cent in 2026 – which will be items never seen by shoppers, as opposed to different colours or variations on existing merchandise, Ms. Frank said.
Lululemon is seeing “greenshoots” related to new product launches, but cautioned it will take time to improve its performance in North America, Ms. Frank said.
However, some of its new products have missed the mark: in January, Lululemon was forced to pull items in its Get Low collection after complaints about poor fit and fabric that was too sheer.
The company also announced that it has appointed a new independent director, former Levi Strauss & Co. chief executive Chip Bergh to its board of directors.
Mr. Bergh was not among the three candidates Mr. Wilson has suggested as new board members. They are: former ESPN executive Laura Gentile, former Activision CEO Eric Hirshberg and Marc Mauer, former co-CEO of sportswear maker On Holding AG.
In a statement released before Lululemon’s announcement, Mr. Wilson wrote that the current leadership team is being “overseen by a board with no brand and product experience,” and that he believes shareholders should understand they are not capable of hiring the right leadership to address those issues.
Mr. Bergh will take the place of David Mussafer, who informed the board that he will not stand for reelection after his three-year term, according to a company statement. Mr. Bergh will stand for election at the upcoming annual meeting of shareholders.
The appointment of Mr. Bergh reflects the board’s “commitment to ongoing refreshment,” a company statement said.