Lululemon’s shares have dropped by more than 20% after the company reduced its annual profit forecast due to economic uncertainty and higher costs caused by US President Donald Trump’s tariffs. The athleisure brand cited lower store traffic in the Americas, inflationary pressures, and changes in discretionary spending as reasons for the decline.
The company plans to implement strategic price increases on a small portion of its products and reduce costs. Lululemon also announced that it will negotiate with its vendors to mitigate the impact of tariffs.
Clothing and footwear brands are among those affected by the US tariffs imposed on Asian countries, where many of their products are manufactured. Adidas and Skechers have already warned about the impact of these tariffs on their businesses.
Lululemon’s finance chief Meghan Frank stated that the company is taking measures to adapt to the changing economic landscape. Nike also recently announced plans to raise prices on some trainers and clothing in the US, although it did not explicitly link this decision to the tariffs.
The decline in Lululemon’s shares highlights the growing concern among businesses about the impact of Trump’s trade policies on their operations and profitability.
Source: https://www.bbc.com/news/articles/c8re86n23j5o