Get ready for fewer sales: Lululemon has a new 'obsession' with full price and minimal discounting

• Lululemon announced plans to boost full-price sales by reducing markdowns.
• The move is one step in the brand's plan to return to its premium positioning.
• It reported a 5% revenue increase year-over-year to $11.1 billion in fiscal 2025.

Lululemon is looking forward to the changes it plans to make in 2026 — customers, maybe not so much.

Full-price and marked down items were the hottest topic during the company's Q4 earnings call on Tuesday. Lululemon reported a 5% revenue increase year-over-year to $11.1 billion in fiscal 2025, compared with a 10% year-over-year increase for the fiscal year 2024.

Despite the revenue increase, the Americas were a particularly challenging region for Lululemon, with net revenue decreasing 4% from Q4 fiscal 2024 to the same period in fiscal 2025.

However, the company's interim co-CEOs said, the company has a plan to turnaround its performance in the region: fewer markdowns and reestablishing itself as a premium brand.

Interim co-CEO and financial chief Meghan Frank told analysts that returning to full price sales growth is a "top priority" for Lululemon in 2026.

Interim co-CEO and CCO Andre Maestrini pointed to Lululemon's positive performance internationally to support the decision to focus on its full-price inventory in North America. Maestrini said an "obsession" with full price and minimal discounting and markdowns is a layer that's helping the company get back to its premium placement abroad.

Along with the reduction in markdowns, Lululemon is attempting to address its missteps by rebalancing its inventory levels.

"Lululemon is in a tough spot," Rachel Wolff, analyst at Business Insider sister company EMARKETER said. "Its lack of compelling product and continued missteps have hurt brand trust while undermining its premium positioning."

In January, it temporarily paused the sale of its "Get Low" collection in North America last week to "review early guest feedback and insights" over the tights being see-through in certain areas.

It's not the first athletic brand in recent years to require course correction after having too many sales. Nike CEO Elliott Hill called out his own company for being "far too promotional" in 2024, impacting the brand and disrupting profitability.

Nike is still in the midst of its own comeback.

It's unclear how getting in the hands of active people through partnerships with pro athletes and sponsorships of major sporting events will play out for Lululemon in 2026. Frank highlighted the first year of a three-year sponsorship of the BNP Paribas Open tennis tournament. It's lost market share to fast-growing athleisure brands like Alo and Vuori.

"While lululemon claims to be bullish about the momentum it's seen in Q1 thus far, the retailer has a lot of work to do to reclaim its cachet," Wolff said.