Lululemon athletica inc. reported second-quarter fiscal 2026 net revenue of $2.4 billion, down 4% from a year earlier, in an earnings release announcing its results.
Comparable sales declined 9%, or 10% on a constant dollar basis, for the quarter ended August 2, 2026. Americas net revenue fell 8% with comparable sales down 12%, while International net revenue rose 4%, or 2% on a constant dollar basis, with comparable sales down 3%.
Gross profit decreased 1% to $1.5 billion and gross margin increased 200 basis points to 60.5%, a figure that included $134.5 million of tariff refunds which added 560 basis points to gross margin. Income from operations fell 13% to $453.7 million, and operating margin decreased 190 basis points to 18.8%.
Diluted earnings per share were $2.92, compared with $3.10 in the same period last year, including $0.86 per share tied to tariff refunds and associated interest, net of tax. The company received $134.5 million in International Emergency Economic Powers Act tariff refunds plus $4.1 million in associated interest during the quarter.
The company repurchased 2.7 million shares for $330.0 million and opened nine net new company-operated stores, ending the quarter with 825 stores. It ended the period with $1.4 billion in cash and cash equivalents and $593.7 million of available capacity under its revolving credit facility. Inventories decreased 1% in dollar terms and 7% on a unit basis.
For the third quarter of 2026, the company expects net revenue between $2.290 billion and $2.320 billion, a decline of 10% to 11%, with diluted earnings per share between $0.93 and $0.98. For full-year 2026, it now expects net revenue of $10.350 billion to $10.500 billion, a decline of 5% to 7%, and diluted earnings per share of $9.48 to $9.73. The full-year outlook includes the $0.86 per share tariff refund benefit but does not reflect any further potential tariff refunds or future share repurchases.
Interim Co-CEO and Chief Financial Officer Meghan Frank said the company is taking a prudent approach with its revised full-year outlook. Interim Co-CEO André Maestrini said the company looks forward to welcoming incoming CEO Heidi O'Neill.