Lululemon Has a ‘Newness’ Problem It Says It Will Fix

Shoppers visited Lululemon’s (LULU) stores and website in the second quarter. When they got there, though, they didn’t see enough new stuff to buy. 

That’s according to executives at the apparel company, which on Thursday reported second-quarter financial results that included a 3% drop in U.S. comparable-store sales and 1% growth in U.S. revenue. 

Executives call the phenomenon “newness,” and it particularly affected women who hoped for more seasonal updates to “color, print, patterns and silhouettes” in some product categories, CEO Calvin McDonald said on a conference call with analysts, a transcript of which was provided by AlphaSense. 

“It’s become clear to us that this reduced newness, which is below our historical level, and stems from earlier product decisions, has impacted conversion rates, given the fewer new options available to our female guests,” McDonald said. “The newness that we had performed well. We simply did not have enough to inspire her to purchase.”

Shoppers Not Finding What They Want

McDonald said the company is working to refresh its lineup “as quickly as possible,” citing as examples leggings, shorts and tracksuits. The missed opportunity, he said, came as shoppers continued to visit Lululemon channels but didn’t find what they wanted. “They were there with intent to spend,” he said. 

“We are optimistic that we will begin to see the benefits of these strategies over the upcoming quarters and return to our historical levels of newness no later than spring 2025,” he said. 

Shares of Lululemon were down about 1% in early afternoon trading after rising as much as 4% in the opening minutes of Friday’s session.

The stock has had a rough year, losing nearly half its value.