"How Can You Wear Something That See-Through?" Consumers Turn Away from Leggings, Lululemon Falters

Growing Preference for Loose-Fitting Pants
Leggings Sales Plunge by 20%
Stock Price Drops Nearly 18%

The growth myth of Lululemon, the Canadian sportswear company that once led the global athleisure market as "luxury yoga wear," is now wavering. In its core market of North America, consumers are turning away and sales of its flagship leggings have plunged by 20%, resulting in an almost 18% drop in the stock price in a single day. Stepping in as Lululemon’s savior amidst this crisis is CEO Heidi O’Neill, who has built her career at Nike for more than 25 years.

On September 8 (local time), international news outlets such as Reuters and WWD reported that O’Neill has officially taken office as Lululemon’s new CEO. O’Neill, who assumed her role on this day, will lead the company’s turnaround in performance and brand rebuilding, succeeding former CEO Calvin McDonald, who stepped down in January. Previously, in April, Lululemon announced the appointment of O’Neill as its new CEO and stated that she would serve as both CEO and member of the board of directors starting September 8.

Lululemon leggings product. Lululemon Instagram

O’Neill is faced with a daunting report card. According to Lululemon’s earnings for the second quarter of fiscal 2026, announced on September 3, revenue stood at $2.4 billion, a 4% decrease from the same period of the previous year. Net profit was $329.22 million, declining by more than 11% from $370.91 million a year earlier. Global same-store sales also dropped by 9%.

Particularly painful was the slump in the Americas, which is responsible for a large portion of the total revenue. Americas revenue dropped by 8% year-on-year, and same-store sales in the region fell by 12%. Although overseas revenue increased by 4%, same-store sales outside North America decreased by 3%, falling short of growth expectations.

The company’s leggings, once a symbol of Lululemon’s growth, have also come under threat. According to Reuters, Lululemon’s leggings sales fell by about 20% in the second quarter.

Lululemon, the Canadian sportswear company that led the global athleisure market, known as "luxury yoga wear." Photo by Reuters Yonhap News

According to industry sources, the shift in consumer preference from body-hugging leggings to more relaxed silhouettes such as wide pants has impacted sales. Lululemon’s management also acknowledged during the post-earnings conference call that there is a trend of consumers seeking so-called "away-from-body" styles that are not tight-fitting. Meanwhile, issues surrounding the products themselves have continued. Some leggings products have been criticized for issues related to fit, design, and transparency. In January, Lululemon even temporarily suspended online sales of its $108 “Get Low” leggings after ongoing consumer complaints about sheerness.

In the meantime, emerging competitors have rapidly gained ground. According to research from the market research firm M Science, Lululemon’s athleisure market share fell by 10 percentage points to 43.9% as of August. In contrast, rival brands Alo and Vuori each increased their market shares by 5.9 and 2.2 percentage points, respectively. This suggests that the market landscape—once synonymous with “leggings equals Lululemon”—is shifting.

The industry views the shift in consumer preference from body-hugging leggings to more relaxed silhouettes like wide pants as a contributing factor. Lululemon's management also acknowledged during the post-earnings conference call that consumers are showing a trend toward so-called "away-from-body" styles that do not cling to the body. Pixabay

The market reaction after the earnings report was also harsh. On the 4th, Lululemon shares plunged about 17.4%, falling to their lowest level in about eight years since 2018. Reuters reported an intraday decline of about 18%. At that time, the share price dropped to around $100, and the decline since the beginning of the year has exceeded 50%. The company also lowered its annual outlook. Lululemon revised its full-year sales forecast down to $10.35 billion to $10.5 billion, expecting a decrease of 5–7% compared to the previous year. The earnings per share (EPS) forecast was also lowered to $9.48–9.73. The previous forecast was $11.0–11.15 billion in sales and EPS of $10.95–11.15.

Wall Street firms are also lowering their expectations. JPMorgan slashed its target price for Lululemon from $154 to $95 but maintained a 'neutral' rating. Bank of America lowered its target from $140 to $122, while Telsey Advisory Group cut its target from $122 to $110. Morgan Stanley also reduced its target price from $93 to $83.

Market watchers say a short-term recovery will not be easy. Neil Saunders, Managing Director at GlobalData, analyzed that the competition is fierce and Lululemon’s problems have deepened significantly, making this not a matter that can be resolved quickly. Some even suggest that the structural shift in demand for leggings could continue for several quarters.

This content was produced with the assistance of AI translation services.