"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 and was known as "luxury yoga wear," is now faltering. In its core North American market, consumers are turning away, and sales of its signature leggings have even plunged by 20%, causing the share price to crash nearly 18% in a single day. Heidi O'Neill, who spent more than 25 years at Nike, has stepped in as CEO to serve as Lululemon's savior amid this crisis.

On September 8, 2026 (local time), international media such as Reuters and WWD reported that O'Neill had officially assumed her role as Lululemon's new CEO. As the new chief, O'Neill will lead the company's efforts to rebound in performance and rebuild its brand, following the departure of former CEO Calvin McDonald in January. Previously, Lululemon announced in April that O'Neill would be appointed as its new CEO, taking on both CEO and Board responsibilities from September 8.

Lululemon leggings product. Lululemon Instagram

The report card O'Neill has received is daunting. According to Lululemon's financial results for the second quarter of fiscal year 2026, announced on September 3, sales reached $2.4 billion, down 4% from the same period last year. Net income was $329.22 million, a decline of more than 11% from $370.91 million a year earlier. Global same-store sales also fell by 9%.

In particular, the sluggishness in the Americas, which accounts for a significant portion of total sales, was painful. Sales in the Americas dropped by 8% compared to the same period last year, and same-store sales slumped by 12%. Overseas sales grew by 4%, but overseas same-store sales fell by 3%, so the growth trajectory did not meet expectations.

The iconic leggings, which embodied Lululemon's growth, have also hit a red light. According to Reuters, Lululemon's leggings sales fell by approximately 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

Industry observers attribute this decline to a shift in consumer preferences away from body-hugging leggings toward more relaxed silhouettes, such as wide pants. Lululemon's management also acknowledged during the post-earnings conference call that consumers are increasingly seeking so-called "away-from-body" styles that do not cling to the body. Product-related controversies have persisted as well. Some leggings have been criticized for fit, design, and sheerness issues. In January, Lululemon temporarily suspended online sales of its $108 "Get Low" leggings after a series of consumer complaints about the product's sheerness.

Meanwhile, emerging competitors have moved in rapidly. According to data from the market research firm M Science, Lululemon's athleisure market share stood at 43.9% as of August, a drop of 10 percentage points. In contrast, competitors Alo and Vuori increased their market shares by 5.9 percentage points and 2.2 percentage points, respectively. This signals that the once-dominant association of "leggings=Lululemon" is being disrupted.

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

Market reaction was also harsh immediately after the earnings announcement. Lululemon shares plunged about 17.4% on September 4, 2026, 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, with the year-to-date decline exceeding 50%. The company further downgraded its annual outlook. Lululemon now forecasts sales for this year to be in the range of $10.35 billion to $10.5 billion, a 5–7% decrease from the previous year. Earnings per share (EPS) guidance has also been lowered to $9.48–9.73, down from the previous forecast of $11.0–$11.15 billion in sales and EPS of $10.95–11.15.

Wall Street has also lowered its expectations in succession. JP Morgan slashed its price target for Lululemon from $154 to $95 while maintaining a "neutral" rating. Bank of America reduced its target from $140 to $122, and Telsey Advisory Group cut theirs from $122 to $110. Morgan Stanley further downgraded its target from $93 to $83.

Market observers predict that a swift rebound will be difficult. Neil Saunders, Managing Director at GlobalData, analyzed that fierce competition and deepening challenges for Lululemon mean that the recovery will not be a short-term matter. Some have even suggested that structural changes in leggings demand may persist over multiple quarters.

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