Lululemon Athletica Slashes Forecasts
Analysis based on 6 articles · First reported Sep 04, 2025 · Last updated Sep 04, 2025
Lululemon's reduced forecasts and subsequent stock drop indicate a broader concern about consumer spending slowdown and the impact of tariffs on the retail sector. This event suggests potential headwinds for other apparel companies, especially those with significant manufacturing in Vietnam and China, as well as those reliant on US holiday spending.
Lululemon has slashed its annual revenue and profit forecasts for the second consecutive quarter, citing a significant slowdown in consumer demand, particularly among Gen Z shoppers, and increased tariff pressures. The company's shares fell approximately 14% after the announcement. This dour outlook comes as US holiday spending is projected to experience its steepest decline since the pandemic. Lululemon expects a $240 million hit on gross profit in 2025 and a $320 million impact on operating margin in 2026 due to higher tariffs and the removal of the de minimis customs exemption by the United States. The company, which manufactures 40% of its products in Vietnam and sources 28% of its fabrics from China, plans strategic price hikes and cost-cutting measures to mitigate these impacts. Analysts from Jefferies anticipate further and more severe guidance cuts.
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