Lululemon Appoints Heidi O’Neill as CEO After Comparable Sales Drop Nine per Cent

Former Nike executive Heidi O’Neill took charge of Lululemon on September 8 after second-quarter comparable sales dropped nine per cent.

Net revenue fell four per cent year over year. In the United States, comparable store sales sank 12 per cent.

The Vancouver-based activewear company lowered its full-year financial outlook and scaled back its physical retail pipeline. Lululemon now plans to open 35 net new stores in 2026, down from an earlier target of 40. It will also trim its operational pop-up fleet to about 40 locations, down from 65 at the end of last year.

Slowing Demand Hits Global Expansion

For landlords and retail operators across Asia and the Pacific, the pullback signals that premium athleisure no longer guarantees footfall. Rapid international sales growth previously cushioned softening retail demand in North America. That buffer eroded in the second quarter when international comparable sales slipped into decline.

Fast-growing rivals such as Vuori and Alo Yoga continue to capture shelf space and customer loyalty across key metropolitan hubs. Lululemon must defend high price points without the product novelty that originally justified them. That leaves franchise partners and department store landlords facing softer conversion rates.

Product Fatigue and Pricing Pressure

Expansion into non-core lifestyle categories failed to resonate with shoppers looking for technical performance. High price tags compounded the problem as consumers rejected premium pricing on basic assortments.

“The reason they are is that Lululemon has gone firmly off the boil,” said Neil Saunders, managing director at GlobalData.

O’Neill’s operational task centres on rebuilding the product engine rather than relying on discounts. Americas revenue slipped three per cent in the first quarter, then dropped eight per cent in the second quarter. Core customer fatigue is accelerating.

Targets for the Turnaround

Momentum has slowed over several quarters. The brand built its original market dominance on proprietary yoga fabrics and studio ambassador networks. Aggressive international scaling then diluted its product focus and slowed its development cycles.

Investors and retail property operators are tracking O’Neill’s initial 90-day operating review and the third-quarter earnings release. Progress against the revised 35-store opening plan will show whether core product fixes can stabilise full-price sales.