Canadian athleisure brand Lululemon has warned that tariffs will significantly impact its profits, leading to a sharp decline in its shares. The company cut its full-year guidance due to a “dynamic macroenvironment” marked by declining store visits, rising competition, and tariff-related uncertainty.
Lululemon’s CEO Calvin McDonald expressed concern over the impact of tariffs on the retail environment, stating that the brand is not seeing growth in the US market. In response, Lululemon plans to implement strategic price increases on a limited portion of its product lineup, including yoga pants and shoes.
The company now forecasts earnings between $14.58 and $14.78 per share, down from an initial forecast of $14.95 to $15.15. Despite this reduction, McDonald emphasized Lululemon’s financial flexibility due to its $1.3 billion cash reserve and no debt.
Lululemon is not alone in facing the effects of tariffs. Gap recently reported that the at least 30% tariff on imports from China could cost it $100 million to $150 million this year, while sister brand Old Navy has launched a budget-friendly activewear line to attract price-conscious customers.
The stock’s decline marks its worst day in over five years, with shares down about 17% and 11% for the year.
Source: https://edition.cnn.com/2025/06/06/investing/lululemon-stock-first-quarter-2025