Lululemon Stock Plunges 22.1% on Tariff Costs, Demand Slowdown

On June 6, 2025, Lululemon Athletica's stock experienced a significant drop of 22.1% in pre-market trading.

Lululemon Athletica has revised its annual profit forecast downward due to increased costs associated with mitigating U.S. tariffs and a slowdown in demand for its latest products. This adjustment comes after the company had already forecasted a 20-basis-point hit from tariffs in March. The company's products are predominantly manufactured in regions affected by these tariffs, which has further exacerbated the financial strain.

Despite the challenges, Lululemon reported a 7% increase in total revenue for the first quarter of fiscal year 2025, reaching $2.4 billion. The company also saw a 2% increase in diluted earnings per share to $2.60. Comparable sales grew by 1%, driven by a 7% increase in women's apparel revenue and an 8% increase in men's apparel revenue. Accessories and other revenue also saw an 8% increase. The company's product innovation and newness across athletic and lifestyle categories have been well-received by guests, contributing to continued revenue growth.

Lululemon's CEO, Calvin McDonald, highlighted the company's agility and strength in navigating the dynamic macroenvironment. The company remains focused on leveraging its strong financial position and competitive advantages to invest in growth opportunities. Despite the challenges, Lululemon continues to engage guests and communities through its membership program, brand activations, and events, ensuring a strong guest experience.