Lululemon’s stock took a big hit today, falling about 20%. That’s a lot in one go. The company basically said, “Hey, profits might not look so great this year,” and that set off alarms for investors. Even though their earnings for the first quarter looked okay, with $2.60 per share and $2.37 billion in sales, there’s more going on under the surface.
They also said they're expecting less profit for the whole year now—somewhere between $14.58 to $14.78 per share, which is lower than what they originally thought. So naturally, investors freaked out a little. And honestly, it makes sense. When a brand like Lululemon says things might slow down, people start to worry.
What's causing the slowdown?
A few things are piling up at once, and they’re all putting pressure on the company:
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Tariffs: Lululemon gets around 40% of its products from countries like Vietnam, Cambodia, and Sri Lanka. The U.S. has new tariffs on items from those places, which makes things more expensive for them.
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Shoppers are pulling back: Especially in the U.S. and China. Lululemon said store traffic isn’t what it used to be. People are being more careful with spending.
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More discounts coming: Because demand is weaker, they might have to start cutting prices more often. That usually means lower profits.
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Other brands are stepping in: Competitors like Alo Yoga and Vuori are getting popular fast. It’s getting harder for Lululemon to keep its usual hold on the athleisure space.
So yeah, it's not just one problem—they’re juggling a few big ones at the same time.
What does this mean for Lululemon going forward?
Their CEO, Calvin McDonald, tried to stay positive. He said they’ll be doing a mix of small price increases and smarter cost-cutting to deal with the tariff pressure. That sounds good, but we’ll have to see how that actually plays out. They’re also trying to launch new styles to keep things fresh, like their “Glow Up” and “Daydrift” lines.
But at the same time, they admitted that they might have to offer more markdowns to keep people buying. And that’s usually not a great sign when a premium brand has to lean on discounts. It tells us people aren’t willing to pay full price like before.
It’s not all doom and gloom, though. Lululemon still has a strong name and loyal fans. But this is definitely a bit of a wake-up call, showing that even a brand this strong isn’t untouchable.
