Athletic retailer cuts full-year forecast as stock loses over half its value in 2025
Lululemon Athletica (LULU) shares plunged nearly 18% on Friday after the company lowered its full-year outlook, citing slowing U.S. demand and the impact of higher tariffs. The drop extended the stock’s year-to-date losses to more than 50%, erasing much of the retailer’s pandemic-era market gains.
The company now expects revenue between $10.85 billion and $11 billion for the year, down from a previous forecast of $11.15 billion to $11.30 billion. This marks the second consecutive quarter that Lululemon has cut guidance, reflecting mounting challenges in its core U.S. market.
Second-quarter revenue of $2.53 billion was broadly in line with Wall Street estimates, and adjusted earnings per share of $3.10 topped forecasts. However, same-store sales rose just 1% year-over-year, missing analyst expectations of 2.76%, with CEO Calvin McDonald acknowledging “disappointment” in both U.S. performance and certain product executions.
Adding to the headwinds, CFO Meghan Frank highlighted “industry-wide challenges” from rising tariff rates. The company pointed specifically to the end of the de minimis exemption, a policy change under the Trump administration that previously allowed shipments under $800 to avoid import duties. The removal has sharply increased costs for retailers like Lululemon.
Analysts were quick to react. Jefferies told clients the situation “is going to get worse… much worse through year-end,” warning that the company’s revised outlook may still be too optimistic given intensifying competition and doubts about the appeal of upcoming product launches.
Once a standout in the athletic apparel sector, Lululemon now faces both macroeconomic and competitive pressures, raising questions about its ability to reignite growth. With shares trading at less than half their peak value, investors are bracing for a tough road ahead.
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