Lululemon Athletica Inc. (NASDAQ:LULU) shares plummeted over 11% in after-hours trading, crashing to their lowest price since 2018 after slashing full-year guidance due to softening traffic and product missteps.
Guidance Cut Triggers Technical Meltdown
The athletic apparel giant reported first-quarter revenue of $2.47 billion, slightly beating consensus estimates, but narrowly missed earnings expectations at $1.69 per share.
However, the sell-off intensified after management significantly lowered its second-quarter and full-year outlook.
According to data visualized in an X post by Barchart, the post-market collapse wiped out years of gains, dragging the stock down to levels not seen in eight years. The company now expects full-year revenue between $11 billion and $11.15 billion, down from its prior projection of up to $11.50 billion.
Interim co-CEO and CFO Meghan Frank attributed the guidance cut to recent execution issues, stating, "More recently, we have been navigating headwinds that have led us to adjust our outlook for the full year".
Read Also: Gary Black Says Broadcom, Marvell Are 'Big Winners' As Focus Shifts To Custom AI Chips As Nvidia CEO Jensen Huang Touts 'Next Trillion-Dollar Company'
Burry Vs Black Wall Street Clash
The downturn puts high-profile institutional investors at immediate loggerheads. Regulatory filings revealed Lululemon as a high-conviction contrarian pick for “Big Short” investor Michael Burry, who previously doubled his stake in the company, betting on a deep valuation gap.
Burry historically dismissed the 2025 retail sell-off as mere "window dressing" for a premium brand.
Conversely, prominent hedge fund manager Gary Black issued a stark warning following the print. Black expressed long-standing criticism of the company’s corporate governance and market positioning.
“$LULU -11% AH after cutting its net revenue and earnings guidance,” Black noted, pointing to a “revolving door of CEOs over the past five years” and “intense competition from Vuori, Alo, and Skims with little or no product differentiation”.
Turning To Chasing And SKU Reductions
To rebuild momentum, Lululemon is increasing its marketing spend and shifting store strategies.
Management plans to reduce store SKUs by 15% for a less dense product presentation while aggressively expanding its “chase capabilities” by 20% to react faster to consumer trends.
How Has LULU Performed In 2026?
In comparison with the Nasdaq Composite’s 15.47% year-to-date advance, shares of LULU have declined by 39.89% over the same period. It closed 0.88% lower at $124.92 apiece on Thursday, but fell to 11.30% at $110.80 in after-hours, plunging below its 52-week low of $116.63, which was the lowest price since 2018.
Over the last month, LULU stock was down 3.15%, and it fell 31.96% and 62.73% over the last six months and the year, respectively. Benzinga’s Edge Stock Rankings indicate that LULU maintains a weak price trend in the long, medium, and short terms, with a solid value score.
Read Also: Lululemon Is Valued Like It's 2010—And Burry's Loving It As Stock Breaks Out
Image created using artificial intelligence via MidJourney.