A rough welcome

Heidi O'Neill took over as Lululemon CEO on Tuesday. In the five months since her April appointment, the company's slide got worse, not better.

“Incoming CEO O'Neill has a mountain to climb.”

The quarter that scared everyone

Comparable North American sales fell 12%. Lululemon cut its full-year outlook for the second time in three months, after running on interim leadership since late January.

Leggings fell off a cliff

Leggings sales dropped 20%, stunning analysts. They are roughly a third of revenue and the highest-margin thing Lululemon sells.

“We did a double take when Lulu called out that leggings were down 20%.”

China stopped growing

Sales in China were climbing by double digits as recently as spring. They have now fallen two quarters in a row, closing off the easiest escape route.

Alo and Vuori are eating in

Lululemon's share of the athleisure market it invented fell 10 points to 43.9% in August, per M Science data. Alo picked up 5.9 points and Vuori 2.2.

Growth pulled it off course

Revenue rose sixfold from 2013 to 2025, hitting $11 billion. Chasing more, Lululemon pushed into footwear, parkas, and skirts, and landed in fights it was not built for.

“They're able to sell a lot, but not mean a lot.”

The discount bin problem

Analysts call the assortment boring, with too much non-core product and no real technical innovation. Items from a premium brand started showing up marked down.

“A combination of an incredibly boring assortment... have all contributed to a rapid loss of brand heat”

She has seen this movie

O'Neill spent 27 years at Nike, which also lost its innovation edge chasing lifestyle wear. She built Nike's women's business into a multibillion-dollar engine, so skeptics cut both ways.

The clock is already running

Shares are down 80% from their 2023 peak, which invites activist investors. Founder Chip Wilson panned her hiring, and his non-disparagement deal expires in November 2027.