Lululemon Athletica Inc.’s showdown with its estranged founder weighed on the retailer’s first quarter so much that it’s revising its forecasts, the company revealed Thursday.

When the apparel maker experienced “spikes of negative commentary” in the media and on social platforms, it had an impact on traffic and the company’s overall performance, interim co-chief executive and chief financial officer Meghan Frank said.

“These stories have died down and subsided, but we have not yet seen a return to our pre,-disruption, I’d say, trends,” Frank told analysts on a call.

As a result, she revealed the company was likely to see net revenue in its fiscal 2026 between US$11 billion and US$11.15 billion, down as much as one per cent from the year before.

She didn’t outline precisely what comments or posts might have caused the most damage, but named the battle with Lululemon creator Chip Wilson and “questions around the composition of some of our products in mid-April” as irritants.

The composition questions were likely referring to an investigation Texas’ attorney general launched to determine whether the company uses “forever chemicals” in its clothing.

While the probe sparked headlines in the U.S. the bigger story was attacks from founder Chip Wilson, who had been pushing since late last year for the company to appoint three of his nominees to its board. Wilson thought the new faces would help reinvigorate the company he built but no longer works at, making it more immune to competitors and resilient on the stock market.

While Lululemon was open to exploring some of the nominees, it complained during the quarter that Wilson made considering them difficult because he blocked access and demanded concessions from the business.

The company eventually put forward its own board nominees, which would have gone head-to-head with Wilson’s slate at a shareholder vote this summer.

Last week, however, both sides came to an agreement. Lululemon promised to appoint two of Wilson’s nominees in exchange for him stopping the disparagement in the lead up to the company’s 2028 annual meeting.

During Lululemon’s first quarter, both sides were pushing their slates and the business named former Nike executive Heidi O’Neill as its next CEO. She will join on Sept. 8.

By the time the quarter swung to a close on May 3, Wilson and Lululemon had yet to sign their agreement.

The Vancouver-based retailer, which keeps its books in U.S. dollars, wrapped the quarter with a net income of US$195 million in its first quarter, down significantly from the US$314.6 million it made a year earlier.

The result amounted to earnings per diluted share of US$1.69, down from US$2.60 a year earlier.

Its revenue was US$2.5 billion, up by about four per cent from its prior first quarter.

In addition to putting some of the blame for the quarter on bad headlines, Frank said, “not all of our product launches have met our expectations.

“While we’ve had several successful launches so far this year, we’ve seen others as we start Q2, not generate the anticipated guest response,” she said.

Yet she said the company was “not sitting still.” It’s been working to speed up the time it takes to introduce new products to stores and playing with silhouettes, colours and styles shoppers will perceive as being fresh.

This report by The Canadian Press was first published June 4, 2026.

Tara Deschamps, The Canadian Press