Lululemon Needs a Full Product Overhaul, Widlitz Says

Watch on YouTube ↗  |  September 03, 2026 at 21:28  |  6:39  |  Bloomberg Markets
Speakers
Stacey Widlitz — President, SW Retail Advisors

Summary

Stacey Widlitz argues Lululemon needs a full product overhaul, citing product missteps, heavy clearance, margin pressure, and share losses to Alo and Vuori. She reiterates a sell on Lululemon and says a turnaround could take six to twelve months under incoming CEO Heidi O'Neill. She points to Victoria's Secret and Gap as evidence that product-led turnarounds can work, while expressing concern about Nike's recent struggles.

  • Lululemon lowered its full-year outlook for a second straight quarter and still lacks a permanent CEO, with Heidi O'Neill incoming.
  • Widlitz put a sell on Lululemon when markdowns appeared in December 2024.
  • North America comps are down double digits and international has also turned negative.
  • Clearance items are up 50-80% year over year and gross margins are down several hundred basis points.
  • Alo and Vuori are opening stores near Lululemon and taking market share.
  • Victoria's Secret comps up 9% shows that product-led turnarounds can work.
  • Gap broke out of a decade-long discounting cycle.
  • Nike's recent struggles raise concerns about hiring from Nike, and Lululemon's product fix may take six to twelve months.
Ideas
Stacey Widlitz President, SW Retail Advisors 0:21
Lululemon product failures justify sell rating.
Lululemon has had two years of product mistakes and is stuck in a discounting cycle, with clearance items up 50-80% year over year and gross margins down several hundred basis points. North America comps are down double digits and international has turned negative, while Alo and Vuori are taking share. Widlitz put a sell on the stock when markdowns appeared in December 2024 and says the brand needs a full product overhaul.
LULU HIGH
Stacey Widlitz President, SW Retail Advisors 3:39
Victoria's Secret turnaround is working broadly.
Victoria's Secret is proof that a product-led retail turnaround can work: comparable sales are up 9% after a two-year turnaround, and the brand is attracting both under-$50,000 and over-$200,000 shoppers, with the high-income cohort performing best.
VSCO MED
Stacey Widlitz President, SW Retail Advisors 5:35
Nike product problems make it unattractive.
Nike's recent trajectory is a caution sign: over the past two years it has struggled in both wholesale and DTC, product has not worked, competition has taken over, and it is going through a margin cleanup. This makes an incoming Nike executive the wrong obvious choice for Lululemon and leaves question marks about Nike itself.
NKE MED
Up Next
5:31
Why Oil Prices Could Rise to $100 Again
Morgan Stanley · Sep 03
2:07
Cash-Strapped Colleges Are Draining Their Endowments to Survive
Bloomberg Markets · Sep 03
17:28
Mercado aposta na derrota de Lula na eleição
Fernando Ulrich · Sep 03
3:58
Market Close: Stocks Higher, S&P 500 Gains Again, Treasury Yields Ease • 9/3/26
CNBC · Sep 03
47:58
US-Iran Conflict Stuck With No End | Radio Balance of Power: Early Edition 9/3/2026
Bloomberg Markets · Sep 03

This Bloomberg Markets video, published September 03, 2026, features Stacey Widlitz discussing LULU, VSCO, NKE. 3 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Stacey Widlitz  · Tickers: LULU, VSCO, NKE