Lululemon shares slump after bleak sales update amid spat with founder

Lululemon shares slumped after it published a bleak sales update amid a spat with its founder and a fiasco over ‘see-through’ leggings. The Canadian sportswear brand, worn by seven-time F1 world champion Lewis Hamilton and the Duchess of Cambridge, said its sales this year have been hit by what interim boss Meghan Frank called ‘negative commentary in the media’. Sales fell 2 per cent in the three months to 3 May, driven by a 6 per cent drop in its Americas region, which includes the US and Canada. This offset an 8 per cent boost in its international business. Shares crashed 11 per cent in pre-market trading in New York after revealing profits fell 3 per cent to £970m for the quarter, compared to the same time period last year. The brand hit the headlines this year after a series of criticisms from founder Chip Wilson, who, in a tirade in January, said the company had reached a ‘new low’ and had ‘completely lost its way’. This was in response to the group having to pause online sales of its new £88 ‘Get Low’ leggings after customers complained they were see-through. Lululemon said its sales have been impacted by negative press and social media chatter Lululemon has also had to grapple with the Texas attorney general announcing a probe into possible ‘forever chemicals’ in its clothes in April. This means the potential that its clothes contain materials that do not break down easily in nature and may be linked to health issues. Lululemon ​has said it does not use the substance known as 'PFAS' in its products. Frank, the group’s chief financial officer, who is steering the company before former Nike boss Heidi O'Neill takes over in September, said it was taking a while for the group to recover after bad press. She said that ‘spikes of negative commentary in the media and on social channels’ had hit traffic. ‘These stories have died down and subsided - but we have not yet seen a return to our pre-disruption trends,’ she said. The group slashed its annual sales forecast to between £8.16billion and £8.28billion, from an earlier range of between £8.42billion and £8.53billion. And Frank admitted that not all of its new products had ‘met our expectations’. Wilson had said: 'I've believed that Lululemon has lost its cool for some time, but it is now evident to me that the company has completely lost its way as a leader in technical apparel.’ He said ‘persistent failures like this’ were down to the board's ‘lack of experience’ and ‘focus on short-term, self-interested priorities.’ Wilson, who stepped down as chairman in 2013, has now agreed not to badmouth the company for a year and a half, in a deal which will see some directors he recommended join the board. Patrick Ricciardi, analyst at Third Bridge, said: 'Lululemon has more trouble bringing guests back into the store than it does attracting them. Its sustained premium positioning with its product innovation and store experience has waned, and competitive proliferation has exacerbated that headwind as more “cool” brands among younger consumers like Alo have taken the spotlight. 'Apparel retail more broadly is mixed with an uptick in consumer pressures in the first quarter of 2026. Momentum is the name of the game here, with brands like Gap leaning on momentum it has built in the past quarters and years while peers with more recent missteps or those who saw earlier post-pandemic brand growth seem to show signs of slowing and have more mixed views by investors.' Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence. 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