ts that revealed a sharper-than-expected decline in sales. Net revenue was down four per cent year over year, while comparable sales fell nine per cent. In the US, comparable sales declined 12 per cent. The company also lowered its expectations for the year and confirmed that it would open fewer stores than planned and reduce its number of pop-ups. It now expects to open 35 net new stores in 2026, down from 40, and operate about 40 pop-ups, compared with 65 at the end of last year. Retail brand strategist and marketing consultant Bethany Paris Ramsay argued Lululemon’s challenge was compounded by intensifying competition in the athleisure market. “Consumers now have more choice at nearly every price point, while brands such as Alo Yoga and Vuori have built their own highly recognisable worlds,” she said. “Lululemon remains enormously well known, but awareness and relevance are not the same thing.” Ramsay said Lululemon’s lacklustre numbers suggested that the company was experiencing a broader branding problem. “Americas revenue declined three per cent in Q1 and eight per cent in Q2, while international comparable sales also moved into decline this quarter. Lululemon cannot assume that geographic expansion will compensate indefinitely for weakening demand in its core market. Reducing store and pop-up openings is a sensible response, but slowing expansion will not fix the underlying problem if consumers are less excited about what is already inside the stores.” Why Lululemon has gone off the boil Meanwhile, Neil Saunders, managing director at GlobalData, agreed, telling Inside Retail, “Things have gone from bad to worse at Lululemon, where total sales are now firmly in decline, driven by some pretty serious revenue erosion in the core Americas market.” Saunders attributed the losses to several factors: a boring assortment, a surplus of non-core products that miss on both fashionability and style, and a lack of meaningful technical innovation. He said pricing had exacerbated these problems because consumers were increasingly unwilling to pay a premium for products they considered mediocre. Saunders also pointed to the overall strength of the athleisure category and the reasonable growth still being recorded by competitors such as Vuori. There was little external reason, he said, for Lululemon’s numbers to be this poor. “The reason they are is that Lululemon has gone firmly off the boil,” said Saunders. He said Lululemon remained a huge business, and the leader in athleisure, but neither distinction offered protection against stagnation in an increasingly fragmented market crowded with strong alternatives, including Alo, Vuori and FP Movement. In previous quarters, Saunders said, the brand’s underperformance had been partially masked by strong international results. While international markets remained an area of relative strength, they could no longer offset the decline in Lululemon’s core market. “We also believe that some of the problems from home are now starting to manifest themselves in lower growth overseas. This is extremely worrying, as it would turn what has been a local problem into a global issue – which is far more difficult to recover from,” said Saunders. “All of this means that Heidi O’Neill inherits an opportunity to change the trajectory, but along with this she gets a big bunch of problems that need to be sorted. Expectations have been lowered, but investors are desperately looking for a very clear course correction strategy that at least puts Lululemon back on a stable footing.” Restoring the brand’s relevance Ramsay told Inside Retail, “Heidi O’Neill’s first priority should be restoring clarity around what Lululemon uniquely owns.” The brand did not need to introduce products simply for the sake of newness, she said. Instead, it needed a sharper pipeline of recognisable and technically credible hero products that would give existing customers a reason to return and new customers a reason to choose Lululemon over increasingly persuasive alternatives. Ramsay said this process should begin with a close examination of whether Lululemon’s product assortment, fit, quality, pricing and storytelling were still meeting consumer expectations, particularly in the women’s business that largely built the brand. She added that O’Neill would need to rebuild Lululemon’s cultural relevance without chasing every trend or imitating its competitors. “Lululemon became powerful because it created a specific community and way of life around its products. That intimacy has become harder to maintain as the company has expanded. The opportunity is to modernise the brand’s expression, strengthen its relationships with athletes and local communities, and create campaigns that feel culturally current while remaining grounded in Lululemon’s performance authority,” said Ramsay. O’Neill’s experience at Nike should help Lululemon strengthen its product innovation, brand storytelling and speed to market, Ramsay said. However, the turnaround should not involve making Lululemon more like Nike. “The goal should be to rediscover what made the brand magnetic and translate it for today’s consumer. More stores and more promotions cannot substitute for that work,” said Ramsay. Barney Stacher, CEO of consultancy Retail OCD, agreed that reducing the number of stores would not be enough. “Fewer doors will not solve the problem if the merchandise behind the doors is not creating excitement. O’Neill’s priority should be rebuilding the product engine: simplifying the assortment, accelerating development timelines, restoring quality confidence and creating a more responsive test-and-chase model that allows winning products to scale quickly,” he said. Stacher added that O’Neill would need to resist turning Lululemon into “Nike in yoga pants”. “Her experience building Nike’s women’s business and connecting product, brand and digital could be enormously valuable, but Lululemon’s advantage has always been its distinctive combination of technical credibility, community and human-scale retail. The answer is not more mass-market celebrity marketing; it is making the brand culturally relevant again without sacrificing what made it special.” During her first 90 days, Stacher said, O’Neill should listen to customers, store educators, ambassadors and product teams while identifying where the organisation had become too slow or insulated. She would then need to establish a small number of visible priorities: restoring product newness, winning back the core North American customer, improving digital storytelling and demonstrating that marketing investment was generating traffic and full-price demand. “The turnaround will not be measured by how many stores Lululemon opens. It will be measured by whether customers once again feel they need to see what Lululemon has created next,” said Stacher. Further reading: How Lululemon lost its muse and what it will take to find her