{"id":1953,"date":"2026-06-07T21:04:02","date_gmt":"2026-06-07T21:04:02","guid":{"rendered":"https:\/\/durhammovinghub.com\/?p=1953"},"modified":"2026-06-07T21:04:02","modified_gmt":"2026-06-07T21:04:02","slug":"lululemon-eyes-key-growth-market-in-china","status":"publish","type":"post","link":"https:\/\/durhammovinghub.com\/?p=1953","title":{"rendered":"Lululemon eyes key growth market in China"},"content":{"rendered":"

Over the past three decades, Lululemon<\/strong> has gone from a niche yoga-pants label to a mall anchor. For most of that run, U.S. sales drove the story.<\/p>\n

Read more 8 2026 Movies I’m Dying to See: ‘The Odyssey’ and More<\/a><\/p>\n

That’s no longer the case.<\/p>\n

The brand that built its name on American fitness studios and suburban storefronts is now leaning hard on a market half a world away. And the latest numbers show why.<\/p>\n

Lululemon (LULU<\/a>) sits in a tricky spot. Its leggings and jackets cost a premium, and shoppers only pay up when they feel good about spending.<\/p>\n

Right now, many American shoppers don’t.<\/p>\n

In the first quarter (ended May 3), total revenue<\/a> rose 4% to $2.5 billion. But that headline number hides a split.<\/p>\n

Translation: existing U.S. stores sold less than they did a year ago.<\/p>\n

Profit took a bigger hit, as Lululemon reported adjusted earnings<\/a> of $1.69 per share, down from $2.60 per share in the year-ago period. <\/p>\n

Gross margin<\/a> fell 410 basis points to 54.2%, primarily due to tariffs and markdowns.<\/p>\n

Interim Co-CEO Meghan Frank pointed to two culprits during the earnings call<\/a>. <\/p>\n

First, a wave of negative media and social media commentary hurt store traffic. Second, some new product launches simply didn’t land.<\/p>\n

“Not all of our product launches have met our expectations,” Frank<\/a> said.<\/p>\n

She added<\/a> that a recent “new look of yoga” campaign drew interest but failed to lift the rest of the lineup.<\/p>\n

For some good news, Lululemon looks to China, where China Mainland<\/a> revenue jumped 30% in the quarter, or 23% after adjusting for currency swings. Comparable sales there rose 13% on a constant-dollar basis.<\/p>\n

A shift in the timing of the Chinese New Year added roughly eight percentage points to the figure. Even so, the gap with the U.S. is striking.<\/p>\n

Put plainly: while American shoppers pulled back, Chinese shoppers leaned in.<\/p>\n

Lululemon’s<\/a> China Mainland segment posted a 42.4% operating margin<\/a> last quarter, making it the company’s most profitable region by a wide margin.<\/p>\n

Related: One of the world’s largest fashion retailer closes 106 stores<\/a><\/strong><\/p>\n

For the full year, Lululemon<\/a> expects China to grow about 20% and expects North America to fall in the high single digits.<\/p>\n

The athleisure giant is putting its money where its forecast is.<\/p>\n

Of the 25 to 30 international stores planned for 2026, the majority will<\/a> open in China, the company said. Lululemon<\/a> ended the quarter with 173 stores there.<\/p>\n

It’s also spending on splashy events to build buzz. <\/p>\n

Last week, more than 2,000 guests practiced yoga on the Great Wall of China at a flagship brand event, Co-CEO Andre Maestrini said on the call. <\/p>\n

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A sixth annual “Summer Sweat Games” run-and-train series kicks off later this summer.<\/p>\n

China wasn’t completely immune to the noise, though. Frank said negative commentary hit the market hardest in late April and early May, then faded.<\/p>\n

Maestrini<\/a> explained:<\/p>\n

“As the brand noise has begun to dissipate, we continue to engage with guests in new and unique ways.”<\/p>\n

Cheng Xin\/Getty Images<\/a><\/p>\n

The broader picture is one of a company in transition.<\/p>\n

Lululemon<\/a> cut its full-year revenue outlook to a range of $11 billion to $11.15 billion. That’s flat to down 1% from last year. <\/p>\n

It also lowered its earnings forecast<\/a> to $10.95-$11.15 per share, down from $13.26 per share in 2025.<\/p>\n

There’s a leadership change coming, too. Incoming CEO Heidi O’Neill joins in September, after a stretch of interim co-CEOs.<\/p>\n

To fight the U.S. slump, the company is chasing<\/a> 20% more product volume than last year. That lets it restock hot sellers faster. <\/p>\n

It’s also reducing store clutter<\/a> by trimming 15% of the items on display, so new styles stand out.<\/p>\n

And it’s spending more to win attention. Marketing<\/a> expenses will rise to roughly 6%-6.5% of sales, up from 5.6% last year.<\/p>\n

Shoppers have noticed Lululemon’s stores feel cleaner and less crowded with product than they did a year ago. That’s by design.<\/p>\n

Whether that’s enough to revive the American business is the open question. For now, the company’s clearest growth engine isn’t at home. It’s in China.<\/p>\n

Related: Lululemon brings back leggings after backlash, warns customers<\/a><\/strong><\/p>\n

The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.<\/i><\/p>\n

Read more Joshua Jackson and Katie Holmes Describe Their ‘Dawson’s Creek’ Relationship<\/a><\/p>\n

This story was originally published June 7, 2026 at 4:17 PM.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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