Lululemon Sales Slow Down, Core Leggings Piling Up at Outlet Stores

Lululemon is facing slowing sales, fewer store visitors, and waning demand for its iconic black leggings, with core products piling up at outlet stores. Analyst Randal Konik says this shows erosion in core demand for the brand's clothes and that CEO Calvin McDonald's efforts to revive sales have hit snags, including US tariffs and consumer spending cuts. Observed sales in the US fell 4.2% in June, and foot traffic to stores dropped 8%. Lululemon's stock has declined 41% this year.

Lululemon Athletica Inc. (NASDAQ: LULU) is currently grappling with several challenges, including slowing sales, reduced store foot traffic, and waning demand for its signature black leggings. These issues have led to a significant accumulation of core products at outlet stores, signaling a potential erosion in core demand for the brand's clothing. Analyst Randal Konik has noted that these challenges are indicative of broader issues, including the impact of US tariffs and consumer spending cuts on the company's sales efforts. Observed sales in the US fell by 4.2% in June, while foot traffic to stores dropped by 8%. As a result, Lululemon's stock has declined by 41% this year, raising concerns about the company's ability to revive its sales performance.

SBI Securities Co. Ltd., a significant investor in Lululemon, reduced its holdings in the company by 69.0% during the first quarter, selling 6,228 shares. Other large investors, such as Apollon Wealth Management LLC and Hohimer Wealth Management LLC, also modified their holdings, with Apollon increasing its stake by 15.8% and Hohimer acquiring a new position valued at about $528,000. Despite these changes, institutional investors and hedge funds continue to hold 85.20% of the company's stock [1].

The company's latest earnings report, released on June 5th, showed that Lululemon reported $2.60 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates. However, the company's revenue was up by only 7.3% compared to the same quarter last year, suggesting that the growth in sales may not be sufficient to offset the decline in core demand. Additionally, the company's CEO, Calvin McDonald, sold 27,049 shares of the company's stock in June, indicating a potential shift in the executive's view on the company's performance [1].

Lululemon's challenges are not limited to the US market. The company is also facing competition in the Indian market, where it is expected to enter through a partnership with Tata CLiQ, the e-commerce arm of the Tata Group. The launch, scheduled for the second half of 2026, will include both a physical retail presence and an exclusive digital storefront. However, the Indian market comes with its own set of challenges, including rising interest in premium activewear but higher price points compared to local and global competitors [2].

In light of these challenges, Lululemon will need to focus on value delivery through product quality, innovation, and experiential engagement to regain consumer interest and drive sales growth. The company's ability to successfully navigate these challenges will be crucial in determining its future performance and stock price trajectory.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-lululemon-athletica-inc-nasdaqlulu-shares-sold-by-sbi-securities-co-ltd-2025-07-16/
[2] https://t2online.in/goodlife/fashion-beauty/lululemon-athletica-enters-india-through-tata-cliq-partnership/2000047