MW A 'rudderless' Lululemon needs to ditch logos and get back to basics, analysts say
By Bill Peters
'Make the color palette normal again,' one analyst says, as the stock sinks toward its lowest close since 2018
Lululemon's stock is down nearly 46% so far this year.
After Lululemon put up more disappointing results on Thursday, Wall Street analysts described the company as "rudderless" and called for a deeper reset of its strategy and style.
Investors hoping for a rebound will have to wait until next year or the year after, they warn.
"It's simple. Brand momentum is fading, share losses are building, and sales per foot are deteriorating, driving sharp margin compression," Jefferies analyst Randal Konik said in a research note on Friday. "The damage under the prior CEO is significant and long lasting."
He added: "A full strategic reset under the new CEO is required." Heidi O'Neill, a longtime Nike veteran, will take over as Lululemon CEO in September.
Konik added that Lululemon needs to stop its store expansions and focus on core products and on fixing its U.S. business. He also said it needs to "make the color palette normal again."
"Disjointed colors, patterns, and logo-heavy designs are diluting brand equity," he said.
Lululemon has struggled over recent years with price-conscious shoppers, competition from brands like Alo and Vuori, a board dispute with its founder and its own aesthetic choices. Executives have said some of the company's styles have gotten "too predictable." And analysts say a departure from core workout wear has damaged the company, posing deeper challenges for O'Neill.
But UBS analysts on Friday noted that since O'Neill doesn't start until later this year, any improvement is unlikely until the second half of 2027 at the earliest.
"We don't see [Lululemon] fixing its core issues any time soon," they said.
Shares of Lululemon were down around 8.6% and trading at around $114 as of midday. If that level holds, it would be the stock's lowest close since December 2018. Lululemon's stock is down nearly 46% so far this year.
The analysts' remarks came after Lululemon on Thursday cut its full-year forecast for the year, following a bruising proxy battle with its founder, Chip Wilson, which management said hurt the company's reputation and sales. While the company expressed optimism about items geared toward running, tennis and golf, it said newer, looser-fitting "away from body" fits haven't had the hoped-for impact.
Lululemon said new products accounted for around 30% of its selection overall, a figure it wants to increase to 35% over this year. As the company tries to speed the development of those products, executives said they had cut product development times to 15 to 16 months, down from 18 to 24 months. Management plans to trim those even further, to 12 to 14 months.
The company is increasing marketing spending as part of its efforts to boost sales. Raymond James analysts noted that Lululemon's new products have failed to attract shoppers for three straight years.
They also noted that as its U.S. business stumbles, Lululemon has increasingly relied on China for growth. During the first quarter, same-store sales in Lululemon's Americas business fell 5%. Internationally, they rose 13%.
Oppenheimer analysts on Friday called Lululemon a "rudderless ship in increasingly choppy seas." They said that given the timing of O'Neill's arrival, any major product relaunch might not happen until early 2028.
"As we have indicated, while remaining constructive upon the underlying prowess of the Lululemon brand, we are increasingly concerned that stagnation could take hold, amid a void of senior leadership and while smaller, more nimble operators continue to 'nip away' within the broader athleisure category," they said.
-Bill Peters
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June 05, 2026 13:18 ET (17:18 GMT)
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