Lululemon shares tumble on weak US demand and tariff pressure

Shares of Lululemon Athletica fell more than 17% in premarket trading on Friday after the athleticwear maker lowered its annual profit and sales forecasts, citing weak US demand and increased tariff costs.

The company reduced its annual profit outlook for the second consecutive quarter on Thursday, as it contends with shrinking market share, rising competition, a volatile economic environment, and tariffs that are impacting discretionary consumer spending.

Lululemon’s shares have declined more than 40% this year. Weekly product launches have had little effect on reviving sales as American shoppers approach the holiday season cautiously.

“We have let our product life cycles run too long within many of our core categories,” CEO Calvin McDonald said during a post-earnings call on Thursday.

Comparable sales for the Americas segment—its largest—declined by 1%, while international sales grew by 15%.

“The US drives the earnings and the US is fading fast here,” Jefferies analyst Randal Konik said in a note.
“Rising competition won’t stop either, which means Lululemon’s earnings per share are permanently impaired,” Konik added.

The company now expects annual profit per share between €12.77 and €12.97, down from its previous guidance of €14.58 to €14.78.

Lululemon estimates a €240 million impact on its 2025 gross profit due to increased tariffs and the removal of the de minimis exemption.

The yogawear maker, which relies heavily on sourcing and manufacturing in Vietnam and mainland China, remains vulnerable to the tariffs introduced under former President Donald Trump’s trade policies.

Lululemon’s forward price-to-earnings ratio—a common stock valuation metric—currently stands at 13.82, significantly lower than Nike’s 39.21, according to data from LSEG.