Lululemon Stock Plummets After Weak 2025 Guidance
Vancouver, Thursday, 4 September 2025.
Lululemon’s stock dropped over 10% following a disappointing earnings forecast for 2025, despite surpassing Q2 earnings expectations, due to tariff impacts and stale product offerings.
Earnings Beat Fails to Satisfy Investors
On September 4, 2025, Lululemon Athletica Inc. (NASDAQ: LULU) reported its second-quarter earnings, revealing a net income of $370.9 million, or $3.10 per share, surpassing the analysts’ estimate of $2.88 per share. Despite this earnings beat, the revenue slightly missed expectations, coming in at $2.53 billion compared to the anticipated $2.54 billion [1].
Weak 2025 Outlook Overshadows Strong Q2 Performance
Lululemon’s announcement of its full-year guidance for 2025 has significantly impacted its stock market performance. The company projected earnings per share (EPS) to be between $12.77 and $12.97, falling short of Wall Street’s estimate of $14.45 per share. Moreover, it expects full-year revenue to range from $10.85 billion to $11 billion, again below the expected $11.18 billion [1]. These projections, coupled with concerns over tariffs projected to reduce profits by $240 million, have led to a stark reaction from investors [2].
Tariff Concerns and Product Strategy
CEO Calvin McDonald highlighted the impact of increased tariffs and changes in de minimis provisions as key factors in the reduced guidance. He noted that the company’s product lifecycles, particularly in the lounge and social categories, have become too predictable, missing opportunities to create new trends. This strategic misstep has contributed to the company’s disappointing outlook [1].
Broader Retail Sector Implications
The market’s reaction to Lululemon’s guidance indicates broader concerns within the retail sector. As a prominent player in athletic apparel, Lululemon’s performance often reflects broader consumer spending trends. The company’s challenges with tariffs, competition, and product strategy could signal potential headwinds for the retail industry at large [3].