Lululemon Athletica is facing a proposed securities class action lawsuit alleging it overstated the strength of its turnaround and failed to disclose how weakening demand and disappointing product launches were hurting its business.

The suit challenges the company’s disclosures during a year in which its revenue outlook shifted from modest growth to contraction. Lululemon initially forecast annual sales growth of 2-4 percent in March. By September, it was projecting a decline of 5-7 percent.

Shareholder Karol Koronczi filed the lawsuit Nov. 2 in U.S. District Court for the District of New Jersey against Lululemon, its chief financial officer Meghan Frank and its president and chief commercial officer André Maestrini. Frank and Maestrini served as interim co-CEOs during the period covered by the suit.

The proposed class includes investors who purchased or otherwise acquired Lululemon securities between March 18 and Sept. 3, 2026.

According to a summary of the complaint published by law firm Pomerantz, the defendants failed to adequately disclose deteriorating store traffic and product demand tied to negative media and social media commentary and new launches that performed below expectations. The suit alleges they understated those problems while overstating the strength of the business and its turnaround plan, particularly in North America and mainland China.

The plaintiff contends those conditions made the company’s financial guidance unrealistic and its public statements materially misleading, according to the firm’s summary.

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