Lululemon Shares Edge Up 0.18% to 2025 High as Product Refresh, Inventory Moves Take Hold

Lululemon Athletica (LULU) shares rose 0.18% on Monday, reaching their highest level since September 2025, with an intraday gain of 1.08%. The rebound comes amid ongoing challenges for the athleisure brand, including revenue forecast cuts and a shift in consumer spending patterns.

The stock’s recent movement follows a broader narrative of internal and external pressures weighing on Lululemon’s performance. Tariff-related cost increases, driven by the removal of the "de minimis" exemption for duty-free imports, have forced the company to adjust pricing and supply chain strategies. Despite these challenges, the market has shown cautious optimism about Lululemon’s efforts to refresh its product lineup and address inventory management issues.

Key factors influencing the stock’s trajectory include evolving consumer behavior, with U.S. shoppers prioritizing affordability over premium purchases. A decline in foot traffic at Lululemon stores—down 8.5% year-over-year—reflects this trend, alongside a 4% drop in comparable sales in the Americas. The company has acknowledged a "product fatigue" in core categories like Scuba and Softstreme, prompting plans to introduce 35% new styles in its spring 2026 collection to reinvigorate customer interest.

Internationally, Lululemon has seen stronger performance, with China and other global markets contributing 22% revenue growth. However, domestic struggles persist, as North American operations remain a drag on overall results. The company’s revised full-year adjusted EPS forecast—from $14.64 to $13.23—highlights the impact of margin pressures and weaker sales, particularly in the U.S.

Strategic responses include accelerating design cycles, optimizing supply chain costs, and balancing price adjustments to offset tariff impacts. While these measures aim to stabilize operations, analysts note that Lululemon’s ability to regain momentum will depend on its execution against a backdrop of rising competition and economic uncertainty. The current valuation, with a forward P/E of 11, suggests potential undervaluation, though risks remain tied to consumer sentiment and global trade dynamics.