Lululemon reported a 2 per cent rise in comparable sales for the second quarter, falling short of the expected 6.05 per cent increase, according to LSEG data. This shortfall was primarily driven by a 3 per cent decline in sales in the Americas, despite a strong 21 per cent surge in China. The company faced additional challenges as it had to withdraw its newly launched “Breezethrough” leggings from stores and its website shortly after the July launch due to customer complaints regarding fit, material quality, and seam issues.
These setbacks come as Lululemon struggles to boost sales, particularly due to a lower inventory of smaller sizes and popular colors in its women’s apparel line. The company also reduced its fiscal 2024 net revenue forecast to a range of US $ 10.38 billion to US $ 10.48 billion, down from the previous estimate of US $ 10.70 billion to US $ 10.80 billion.
Analysts warn of a challenging holiday sales season, citing increased competition from rapidly growing brands like Alo, Vuori, and Rhone. Jefferies analyst Randy Konik noted, “Athleisure spending continues to wane overall, but we have also seen Alo and Vuori continue to gain share against Lulu.”
