By Neil J Kanatt

March 17 (Reuters) - Lululemon forecast 2026 revenue and profit below analysts' estimates on Tuesday and appointed a former chief of jeans maker Levi Strauss to the board, which is facing a proxy fight.

The yoga gear maker also said it expects to offset "almost all" of the U.S. import tariff impact as it looks to reduce markdowns and boost more full-price sales.

Lululemon, known for its pricey leggings and athleisure clothing, has been grappling with a lack of design freshness, softer customer spending and competition from larger rivals such as Nike and upstarts, including Alo Yoga and Vuori.

"A top priority for the management team as we enter the year is returning to full-price sales growth in North America ... through a series of steps that include the inflection of product newness, SKU (stock keeping unit) reduction and rebalancing the inventory levels," interim co-CEO and Chief Financial Officer Meghan Frank said on a post-earnings call.

The athletic apparel maker is searching for a permanent CEO after Calvin McDonald's departure in January, while also navigating a proxy fight by its founder Chip Wilson, who has increasingly criticized the board's strategic direction and its handling of CEO succession.

Lululemon said it has appointed former Levi Strauss CEO Chip Bergh to its board, praising his "proven record of guiding successful transformations" and said that David Mussafer would not stand for re-election following his current term.

Wilson, who owns 4.27% of the company, had earlier questioned Mussafer's re-election, citing a conflict of interest as he oversees the process to interview board nominees.

The founder had also nominated three independent directors to the company's board and called for annual board elections.

New board member Bergh is a strong choice with his experience in the apparel industry, said David Swartz, an analyst at Morningstar.

Lululemon expects annual revenue to be between $11.35 billion and $11.50 billion, compared with analysts' average estimate of $11.52 billion, according to data compiled by LSEG.

It forecast annual profit of $12.10 to $12.30 per share, below expectations of $12.58.

"It is still early in the year, and it makes sense for Lululemon to guide low, especially since it doesn't have a permanent CEO in place," said Swartz.

Sustained weakness in athletic apparel and footwear across every income cohort and age group, alongside renewed inflation concerns and wobbling consumer confidence, adds pressure for a brand at Lululemon's price point, Consumer Edge analyst Michael Gunther said.

Lululemon's shares were down about 1.5% in extended trading. They have fallen roughly 23% so far this year.

The company, which relies on China for sourcing and manufacturing, said its forecast reflects a gross U.S. import tariff impact of about $380 million, up from $275 million in 2025.

Its gross margin decreased 550 basis points during the fourth quarter, with a 520 bps impact from U.S. import tariffs.

Still, the company beat analysts' expectations for the crucial holiday quarter, which also exceeded its January preliminary guidance, supported by a 17% jump in international revenue.