Lululemon has warned of a softer outlook for its upcoming financial year, despite strong growth in the brand’s international markets.
The athletic apparel retailer said that tariffs, high expenses and the continued battle with its founder would weigh on its bottom line for the year to February 1, 2027.
It expects sales to fall between $11.35bn (£8.52bn) and $11.5bn (£8.64bn), below previous estimates of $11.52bn (£8.65bn).
Lululemon is forecasting tariffs to cost the business $380m (£285.5m) this year, up from $275m (£206.6m).
The warning comes as the brand posted a 12% decline in net income to $1.58bn (£1.18bn) in the year to February 1, 2026, down from $1.81bn (£1.36bn).
This was despite a 5% increase in sales to $11.1bn (£8.34bn), with a 22% surge in international markets driven by new store openings offsetting a 1% dip in Americas.
Lululemon interim co-chief executive and chief financial officer Meghan Frank said: “We are pleased to achieve fourth quarter revenue and EPS results ahead of our expectations.
“As we begin our new fiscal year, we are focused on executing on our action plan, offering new and differentiated products to our guests, and elevating their experiences with Lululemon.
“Driving improvement in our full-price sales over the course of 2026 is also a key priority, particularly in North America, and will enable us to enhance our brand health and deliver long-term growth and value creation for shareholders.”
Interim co-chief executive, president and chief commercial officer André Maestrini added: “Throughout 2025, we reported double-digit revenue growth in our international business and are taking action to incorporate learnings from across our regions to drive forward our strategies.
“Our teams are energised by the initial response to our recent product launches and continue to deliver successful guest activations globally.
“Looking ahead, we are encouraged by our opportunities in North America and around the world and are grateful to our teams for their commitment to delivering the products and experiences our guests love.”
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