Lululemon Q2 comp sales fall 9% as CEO transition looms

Lululemon reported second-quarter net revenue of $2.47 billion, down 4% year over year, while comparable sales fell 9% globally. The decline was steepest in the Americas, where comparable sales dropped 12%, and sales were down across all major regions.

Interim co-CEOs Meghan Frank, also the CFO, and André Maestrini told analysts that first-quarter results had suggested the turnaround was gaining traction—revenue rose 4% in Q1, close to the 5% increase seen in the prior year. But momentum faded as the second quarter unfolded.

“As we moved into Q2, we faced negative commentary in the media and social channels,” Frank said on the earnings call. On the company’s first-quarter call, she had cited a proxy battle with founder Chip Wilson and an investigation launched by Texas Attorney General Ken Paxton into alleged PFAS “forever chemicals” in Lululemon products as contributing headwinds.

Wall Street analysts pressed executives on whether the athleticwear brand has accurately identified the root causes of its struggles. The uncertainty comes just days before Heidi O’Neill, a former Nike executive, begins her tenure as CEO on Sept. 8, tasking her with steering Lululemon through a period of weakening sales and reputational scrutiny.