Lululemon Shares Tumble as Yogawear Firm Warns Tariffs Will Crimp Profit
Lululemon Athletica's shares fell 21% in premarket trading on Friday, as the maker of high-end leggings warned that tariff-related costs and uneven demand in key markets of North America and China will dent its profits this year.
The Canadian firm, whose Align yoga pants sell for $128 apiece on its website, will raise prices "modestly" for a "small portion of the assortment" and ramp up discounts for the rest of the year, company executives said.
Lululemon has struggled to retain shoppers, despite its efforts to introduce new styles of sports bras and athletic jackets, as it faces intense competition from trendier and more affordable brands in North America and mainland China.
"Despite (Americas) decline, management continues to prioritize product newness and China expansion over addressing a pullback from core customers and evident traffic declines," Jefferies analyst Randal Konik said in a note.
"We believe this misalignment is concerning."
Lululemon joins sportswear rivals Nike and On in raising prices in the US as erratic trade tactics under President Donald Trump rattle global markets and fuel fears of a recession.
Lululemon trimmed its 2025 earnings forecast and said it expects margins to come under pressure from the proposed tariffs, which will impact products from some of its largest sourcing hubs in Vietnam, Cambodia and Sri Lanka.
"My sense is that in the US, consumers remain cautious right now, and they are being very intentional about their buying decisions," CEO Calvin McDonald said on a post-earnings call.
The company's stock, which is down about 14% this year, was trading at $261.90 before the bell on Friday. The news dragged Nike's shares down 1.4%.
Lululemon's forward price-to-earnings multiple, a common benchmark for valuing stocks, is 21.46, compared to that of 31.37 for Nike and 9.54 for Gap.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab News
10 hours ago
- Arab News
Trump has no plans to call Musk, White House says after feud
WASHINGTON: The White House squashed speculation that Donald Trump and Elon Musk would patch up their stunning public feud, saying the US president had no plans to call his billionaire former aide Friday. Trump lobbed fresh insults at the South African-born Musk a day after the fiery implosion of their unlikely political marriage, saying the tech tycoon had 'lost his mind.' In a telling symbol of how their relationship had deteriorated, the president was even considering selling or giving away a Tesla he had bought to show support for Musk amid protests against the company. The row exploded on Thursday when Trump said he was 'very disappointed' by Musk and threatened to end his government contracts, after his ex-aide criticized the president's flagship budget bill as an 'abomination.' Reports had emerged that Musk and Trump would speak by phone on Friday in a bid to patch up the damaging public row, but the White House scotched such speculation. 'The president does not intend to speak to Musk today,' a senior White House official told AFP on condition of anonymity when asked if the feuding pair planned to speak. Trump told broadcaster ABC in a phone call earlier Friday that he was 'not particularly interested' in talking to Musk. 'You mean the man who has lost his mind?' ABC quoted Trump as saying. Trump, who once called Musk a 'genius,' branded him 'crazy' on social media on Thursday. The row could have major political and economic fallout, as shares in Musk's Tesla car company seesaw and the SpaceX boss vowed that he would end a critical US spaceship program. The White House called a special meeting on Thursday to discuss how to handle the crisis with Musk, a government source told AFP on condition of anonymity. Trump meanwhile may ditch the red Tesla that he bought from Musk's firm at the height of their relationship. The electric vehicle was still parked on the White House grounds on Friday. 'He's thinking about it, yes,' the senior White House official told AFP when asked if Trump would sell or give away the Tesla. Trump and Musk had posed inside the car at a bizarre event in March, when the US president turned the White House into a pop-up Tesla showroom after protests against Musk's government role tanked the firm shares. Speculation had long swirled that a relationship between two big egos like the president and the tycoon could not last long — but the speed of the meltdown took Washington by surprise. Trump said in a televised Oval Office diatribe on Thursday that he was 'very disappointed' after his former top donor criticized his 'big, beautiful' spending bill before Congress. The pair then hurled insults at each other on social media — with Musk even posting, without proof, that Trump was referenced in government documents on disgraced financier and sex offender Jeffrey Epstein.
Al Arabiya
11 hours ago
- Al Arabiya
Europe can sustain Ukraine's war effort without US, German general says
Europe is capable of sustaining Ukraine's resistance against Russia, even if the United States were to decide to completely halt its military support to Kyiv, the senior military official in charge of coordinating Germany's arms supplies told Reuters. Major General Christian Freuding said NATO's European members plus Canada had already exceeded the estimated $20 billion worth of US military aid provided last year to Kyiv. They accounted for around 60 percent of the total costs borne by the Western allies, he said. 'The war against Ukraine is raging on our continent, it is also being waged against the European security order. If the political will is there, then the means will also be there to largely compensate for the American support,' Freuding said in an interview. Ukraine continues to receive weapons deliveries approved by former US President Joe Biden. It is unclear, however, whether his successor Donald Trump will sign off on any new supplies - or allow third countries to purchase US weapons for Kyiv. Asked how long the Biden-approved deliveries will sustain Kyiv, Freuding said this depended on logistical processes as well as the speed at which Ukraine burns through arms and ammunition, but that the summer seemed a realistic estimate. 'How the American government handles further requests for military support for Ukraine is unclear at the moment. We can't say anything about that,' he added. 'In general, the US has a great interest in boosting its own defense industry. I make the cautious assumption that at least purchasing US defense goods, and delivering them to Ukraine, will be possible.' Russian rearmament Addressing the potential threat that Russia might pose beyond Ukraine, Freuding said Moscow had a clear plan to reconstitute and grow its military, and was expected to succeed in efforts to double its land forces to 1.5 million by 2026. 'They are recruiting significantly more personnel than they need as replacements for the war in Ukraine. They are producing surplus stocks of ammunition, in particular, which they are 'putting on store.'' Freuding said Russia was also ramping up its military infrastructure, especially in its western military district bordering new NATO member Finland. Any ceasefire in Ukraine could allow Russia to accelerate its rearmament efforts ahead of a possible large-scale attack on NATO territory, he said. The alliance currently believes this could occur from 2029. 'Of course, a ceasefire could change the threat situation,' Freuding said. Russia denies planning to attack NATO and says it is waging a 'special military operation' in Ukraine to protect its own security against what it casts as an aggressive, hostile West. Germany has provided a total of 38 billion euros ($43 billion) in military aid to Ukraine, including funds earmarked for the coming years, making it the second largest donor after the United States, the defense ministry in Berlin says. Freuding said he was not aware of the Trump administration having endorsed any US arms deliveries to Kyiv paid for by third countries. Still, making up for certain crucial parts of US military support to Ukraine would pose significant challenges to Europe. Listing capabilities that would be hard for Europeans to replace, Freuding cited US intelligence, surveillance and reconnaissance (ISR) data, air defense systems like Patriot and spare parts for US weapons. 'If we are capable of replacing specific (ISR) capabilities to a sufficient extent - we need to look into this when we definitely know the Americans won't provide this data anymore.' Ukraine uses US intelligence data to help its air defense, and analysts say also for targeting.
Al Arabiya
12 hours ago
- Al Arabiya
Feuding Trump and Musk are now not expected to speak on Friday
US President Donald Trump and his one-time close ally billionaire Elon Musk were now not expected to talk on Friday, despite efforts by White House aides to get a truce after a huge public clash the previous day. A White House official told Reuters that no call was planned for Friday. A White House official had said earlier that the two men would speak on Friday. A call could ease the feuding after an extraordinary day of hostilities - largely conducted over social media - that marked a stark end to a close alliance. Shares in Musk's Tesla closed down over 14 percent on Thursday, losing about $150 billion in market value in the largest single-day decline in value in the electric vehicle maker's history. In pre-market trading on Friday they pared some of those losses, rising as much as 5 percent after the early news that the two men were scheduled to speak. Musk had bankrolled a large part of Trump's presidential campaign and was then brought as one of the president's most visible advisers, heading up a sweeping and controversial effort to downsize the federal workforce and slash spending. The verbal punches erupted on Thursday after Trump criticized Musk in the Oval Office and the pair then traded barbs on their social media platforms: Trump's Truth Social and Musk's X. The falling-out had begun brewing days ago when Musk, who left his role as head of the Department of Government Efficiency a week ago, denounced Trump's sweeping tax-cut and spending bill.
