Lululemon Athletica's stock experienced an after-hours plunge of 9.54% following the release of its quarterly earnings report. The significant drop came as investors reacted negatively to the company's revised outlook for the fiscal year.

The athletic apparel maker cut its annual revenue and profit forecasts, citing waning brand appeal in the U.S. amid tough competition and slowing demand. The company now expects fiscal 2026 revenue to be flat to decline 1%, compared with its prior forecast of a 2% to 4% increase. Full-year earnings per share are projected between $10.95 and $11.15, down from the previous range of $12.10 to $12.30.

According to company reports, Lululemon is grappling with significant challenges in its key North American market, where net revenue decreased 3% and comparable sales fell 5% in the first quarter. The company also faces tariff headwinds that are weighing on profitability. These factors have led to a downward revision of guidance that fell short of analyst expectations, prompting the sharp sell-off in after-hours trading.