Lululemon (LULU +2.16%) and its once iconic yoga pants keep getting stuck in uncomfortable positions. The athleisure retailer's recent fiscal second-quarter earnings were disappointing, with revenue down 4% and the anticipated turnaround nowhere to be found. So is Lululemon nearing the bottom now?
NASDAQ: LULU
Key Data Points
Comparable sales fared even worse this quarter, dropping 10% globally. In North America, revenue fell 8% and comparable sales were down 12%. The market reacted brutally, with shares falling more than 17% in after-hours trading. The stock's fall marked a new 52-week low. Lululemon also projects a 10% to 11% decline in revenue for the third fiscal quarter.
Lululemon's stock, as of this writing, has declined more than 75% in the past five years. There's a glimmer of hope for the company, though, as Heidi O'Neill steps in as CEO as of Sept. 8. She's inheriting a slew of tough challenges, but a fresh leadership perspective may be just what the struggling brand needs.
Image source: The Motley Fool.
O'Neill is a former Nike executive who will focus on growth. She will have the opportunity to rebuild much of Lululemon's senior leadership, as many top executives left the company over the last year.
While the next quarter or two are likely to be rough as well, the bottom for Lululemon could be approaching. New leadership can catalyze a turnaround. There is still a long and difficult road ahead for the company, but recovery could take hold in 2027 under O'Neill's watch.
