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New York Post
2 days ago
- Business
- New York Post
Lululemon fans furious as tariffs threaten to drive prices even higher amid stock plunge
Lululemon lovers are already stretching their wallets to the limit — and now they've had enough. Fans and critics alike were clucking their tongues Friday after the athleisure giant warned customers they'd soon be paying even more for already-pricey workout gear — following a whopping stock nosedive. The culprit? President Donald Trump's tariffs — and, apparently, broke Americans tightening their purse strings. Advertisement 'We experienced lower store traffic in the Americas, partially reflective of economic uncertainty, inflationary pressures, lower consumer confidence, and changes in discretionary spending,' the company said in a recent statement. Translation: Even the brand's cult-following of millennial and Gen Z yoga bunnies aren't splurging $128 on leggings like they used to. 4 Even Lululemon's loyal legging junkies — from millennial moms to Gen Z gym rats — are tightening their waistbands on those $128 yoga pants. Bloomberg via Getty Images Advertisement Execs are scrambling as the one-time Wall Street darling fell short of analyst predictions, seeing just a 1% increase in sales year-over-year, falling short of the 3% forecast. 'We are planning to take strategic price increases … on a small portion of our assortment, and they will be modest in nature,' chief financial officer Meghan Frank said on an earnings call, adding the hikes will roll out within weeks. 'It will be price increases on a small portion of our assortments, and they will be modest in nature,' she claimed. 4 The blame for all this? President Trump's tariffs — and cash-strapped shoppers cutting back. REUTERS Advertisement CEO Calvin McDonald admitted he was 'not happy' with U.S. growth figures and blamed the belt-tightening on skittish shoppers. 'We experienced lower store traffic … lower consumer confidence,' he echoed. While some may point to floundering new lines like the Glow Up collection or Daydrift trousers, the company is pinning the blame on tariffs — particularly those slapped on goods made in Vietnam and China, where the company sources most of its fabrics. In 2024, 40% of Lululemon's products were made in Vietnam, and 28% of its fabrics came from mainland China — both hit hard by Trump's trade crackdown. Advertisement Now, Lulu says it's working to cut costs and negotiate with vendors to offset the tariff hit. But customers aren't exactly downward dogging in support. On X, disgruntled users lashed out at the brand's pricing and manufacturing decisions. 4 The athleisure company says it's trimming costs and haggling with vendors to ease the tariff pain — but shoppers aren't exactly striking a warrior pose in approval. SOPA Images/LightRocket via Getty Images 'You better get it together. Lulu. Using tariffs as an excuse in your rest of the year outlook is not a smart move. Amazon/Walmart tried this it didn't go well. You're Down 65$ today. Our family was a big lulu fan not so much anymore,' one raged. 'For what they charge for their products, you'd think it was made in America,' snapped another. 'It can't be that yoga pants shouldn't cost $125 a pair. No. That's not it,' someone joked. Others were more blunt: 'Their stuff is ridiculously overpriced… total ripoff.' 'Lululemon's collapse isn't about tariffs — it's about betting on foreign manufacturing while ignoring American resilience,' one critic seethed. Advertisement They continued, 'Relocating production… was always a gamble, and now they're paying for it.' Some simply slammed the entire brand: 'Lululemon clothing is so overpriced — always has been. Only the Gen Zers think its the name on them that make them special.' 4 In 2024, Lulu pumped out 40% of its gear in Vietnam and got 28% of its fabrics from China — two prime targets in Trump's tariff smackdown. Bloomberg via Getty Images Advertisement Another scorched: 'Stupid rich women paying exorbitant prices for stretch pants. SMH.' Despite the backlash, Lululemon doesn't appear to be sweating just yet — but with costs climbing and customers stretching their budgets, the future might not be quite so flexible.
Yahoo
2 days ago
- Business
- Yahoo
Lululemon to raise prices as progress stalls in the US
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Lululemon is raising prices and prepping for a hit to gross margin as tariffs sweep the industry, executives said on a Thursday earnings call. CFO Meghan Frank said the price increases would be modest, strategic and apply to just a small portion of its assortment. They'll go into effect in the second half of Q2 and into Q3. The retailer largely maintained its guidance for the year, calling for roughly 5% to 7% revenue growth, but lowered earnings per share estimates. Lululemon also said margins would decrease more than planned given the current 30% tariffs on China and 10% on remaining countries. Gross margin is expected to decline by 110 basis points this year, compared to previous guidance for a 60 basis-point decrease. Revenue in the quarter was up 7% to $2.4 billion, with growth in the Americas landing at 3% and international up 19%. Comps in the quarter grew just 1% thanks entirely to international, as comps fell 2% in the Americas. While Needham analyst Tom Nikic called Lululemon's results 'fairly lackluster,' he and others noted that the market's reaction was outsized compared to the retailer's actual performance, especially given that guidance cuts were the result of tariffs. 'That said, the domestic business remains sluggish and international comp growth slowed dramatically in Q1, likely raising questions about the growth [algorithm] from here,' Nikic said in emailed comments. Lululemon store traffic declined in the quarter, especially in the U.S. market, Frank said. CEO Calvin McDonald noted that those shoppers in particular are being cautious about spending right now, making a recovery in the region more difficult. 'We're not seeing the same discerning consumer in Canada as we are seeing in the U.S. in terms of traffic as well as some other metrics that we monitor,' he said. He stressed that Lululemon still gained share across both men and women in the U.S. and said shoppers are responding well to newness in the assortment, including the No Line Align legging and the Daydrift trouser. The leggings will be in all the retailer's stores by September and the Daydrift will be restocked around the same time, potentially leading to more upside ahead. Wells Fargo analysts noted that newness has now returned to historic levels after the retailer last year fell short on choices for U.S. shoppers, but analysts were overall disappointed in the somewhat lengthy timeline for product rollouts and the lack of progress in the U.S. While analysts expected stabilization in the U.S., Wells Fargo said 'we received the opposite,' and Jefferies analysts noted bleakly that the Americas 'keeps getting worse.' 'Despite this decline, [management] continues to prioritize product newness and China expansion over addressing a pullback from core customers and evident traffic declines. We believe this misalignment is concerning,' Jefferies analysts led by Randal Konik said in emailed comments. 'Fixing the Americas should be the top priority given its size (75% mix), yet the focus on newness isn't resonating broadly and the unaddressed rise in competition has led to increased promotions.' Sign in to access your portfolio
Fashion Network
3 days ago
- Business
- Fashion Network
Lululemon tumbles as slowing demand, tariff woes lead to annual profit cut
This comes at a time when U.S. President Donald Trump 's chaotic tariff implementation on all global trading partners has fanned fears that the economy is headed for tepid growth and stagflation, pushing customers to prioritize essential purchases and not splurge. "We experienced lower store traffic in the Americas, partially reflective of economic uncertainty, inflationary pressures, lower consumer confidence, and changes in discretionary spending," Lululemon said. In March, Lululemon forecast downbeat annual targets that included a 20-basis-point hit from tariffs. Lululemon said that 40% of its products were manufactured in Vietnam in 2024, and 28% of its fabrics were sourced from mainland China. The company now expects annual profit between $14.58 and $14.78 per share, compared with previous expectations of $14.95 to $15.15 each. Lululemon forecast second-quarter revenue between $2.54 billion and $2.56 billion, compared with estimates of $2.56 billion, according to data compiled by LSEG. It expects second-quarter profit between $2.85 and $2.90 per share, compared with estimates of $3.29. "Lululemon also hasn't had a lot of huge hit products recently that are having some effect," said Morningstar analyst David Swartz. Lululemon has introduced new apparel franchises for men and women — including the Glow Up activewear collection and its new lifestyle trousers Daydrift — after setbacks in innovations such as its Breezethrough leggings collection. The company's first-quarter revenue rose 7% to $2.37 billion, topping estimates of $2.36 billion. It maintained its annual revenue forecast of $11.15 billion to $11.30 billion. "Lululemon has a history of beating numbers, so even when Lululemon doesn't raise estimates, that's considered to be kind of a disappointment," Swartz added.
Fashion Network
3 days ago
- Business
- Fashion Network
Lululemon tumbles as slowing demand, tariff woes lead to annual profit cut
This comes at a time when U.S. President Donald Trump 's chaotic tariff implementation on all global trading partners has fanned fears that the economy is headed for tepid growth and stagflation, pushing customers to prioritize essential purchases and not splurge. "We experienced lower store traffic in the Americas, partially reflective of economic uncertainty, inflationary pressures, lower consumer confidence, and changes in discretionary spending," Lululemon said. In March, Lululemon forecast downbeat annual targets that included a 20-basis-point hit from tariffs. Lululemon said that 40% of its products were manufactured in Vietnam in 2024, and 28% of its fabrics were sourced from mainland China. The company now expects annual profit between $14.58 and $14.78 per share, compared with previous expectations of $14.95 to $15.15 each. Lululemon forecast second-quarter revenue between $2.54 billion and $2.56 billion, compared with estimates of $2.56 billion, according to data compiled by LSEG. It expects second-quarter profit between $2.85 and $2.90 per share, compared with estimates of $3.29. "Lululemon also hasn't had a lot of huge hit products recently that are having some effect," said Morningstar analyst David Swartz. Lululemon has introduced new apparel franchises for men and women — including the Glow Up activewear collection and its new lifestyle trousers Daydrift — after setbacks in innovations such as its Breezethrough leggings collection. The company's first-quarter revenue rose 7% to $2.37 billion, topping estimates of $2.36 billion. It maintained its annual revenue forecast of $11.15 billion to $11.30 billion. "Lululemon has a history of beating numbers, so even when Lululemon doesn't raise estimates, that's considered to be kind of a disappointment," Swartz added.
New York Post
3 days ago
- Business
- New York Post
Lululemon shares plummet as tariff costs, rivals threaten profit outlook
Lululemon cut its profit forecast for the year, hurt by higher costs to mitigate US tariffs and as tepid demand for its latest products failed to draw away buyers from upstart athleisure rivals such as Vuori. Lululemon Athletica's shares slumped 22% in trading after the bell on Thursday. 'We experienced lower store traffic in the Americas, partially reflective of economic uncertainty, inflationary pressures, lower consumer confidence, and changes in discretionary spending,' Lululemon said in a statement. 3 Although Lululemon has been betting on its new product offerings to boost demand, it is still struggling to drum up sales as competitors, including Alo Yoga and Vuori, gain more traction. Getty Images President Trump's chaotic global tariffs have fanned fears that the economy is headed for stagflation, pushing even wealthier shoppers to prioritize essential purchases. Companies are diversifying sourcing and increasing prices to mitigate any hit from tariffs, which are expected to shrink margins. 'We are planning to take strategic price increases … on a small portion of our assortment, and they will be modest in nature,' Lululemon's finance chief Meghan Frank said. The company will also negotiate with vendors and cut costs, Lululemon said in a filing. In 2024, 40% of Lululemon's products were manufactured in Vietnam, and 28% of its fabrics were sourced from mainland China. 3 In March, Lululemon forecast downbeat annual targets that included a 20-basis-point hit from tariffs. Getty Images 3 'Lululemon also hasn't had a lot of huge hit products recently that are having some effect,' said Morningstar analyst David Swartz. REUTERS The company now expects annual profit between $14.58 and $14.78 per share, compared with previous expectations of $14.95 to $15.15 each. Lululemon also forecast second-quarter profit below an average estimate from LSEG. Its revenue forecast of between $2.54 billion and $2.56 billion was largely in line. 'Lululemon also hasn't had a lot of huge hit products recently that are having some effect,' said Morningstar analyst David Swartz. It introduced new apparel franchises for men and women — including the Glow Up activewear collection and its new lifestyle trousers Daydrift — but those have done little to boost sales. 'Lululemon has a history of beating numbers, so even when Lululemon doesn't raise estimates, that's considered to be kind of a disappointment,' Swartz added.
