lululemon Pulls Back on Store Openings Following Disappointing Q2

lululemon plans to shrink its fleet of pop-up stores from 65 at the end of 2025 to roughly 40 by the end of 2026. Furthermore, 35 net new company-operated stores are planned for the year, down from about 40 guided last quarter. The pullback on store count comes as lululemon announced weak second-quarter results and lowered its outlook for the rest of 2026. lululemon's fiscal second quarter (ended in July) revenue fell 4 percent, and comparable sales dropped 9 percent.

Meghan Frank, lululemon’s interim co-CEO and CFO, said the company is being deliberate about its brick-and-mortar store strategy. “We will continue to take that posture as we move throughout 2027 as well, really scrutinizing every deal,” Frank explained.

Total Retail's Take: This news signals a commitment from lululemon to greater capital discipline during its turnaround. lululemon is still planning approximately 35 net new company-operated stores this year, including about 25 internationally, yet the retailer appears to be reducing speculative real estate bets while investing in locations where demand has already been demonstrated (e.g., converting successful pop-up stores into permanent locations).

Rightsizing its store fleet is just one component of lululemon's turnaround plans. The retailer is focused on restoring demand and brand momentum. Its Q2 SEC filing notes the Americas business experienced reduced traffic, lower conversion and lower average order value. lululemon ultimately needs stronger product innovation and marketing to give existing customers reasons to return while attracting new ones.

Analysts and investors will be closely watching whether lululemon's Americas traffic and comparable sales begin to stabilize. If noticeable gains aren't seen in those areas, additional cost and real estate cuts could follow as lululemon pursues longer-term growth.