Lululemon Bends Under Pressure as Tariff Fears Drive 20% Stock Drop Following Profit Warning

Even premium activewear can’t stretch far enough to escape the tariff troubles. On Friday, LululemonLULU

watched its shares tumble 20% after slashing full-year profit projections, noting President Trump’s trade policies as the reason for squeezing margins across its global supply chain. The athleisure player blamed a cautious consumer environment for the disappointing outlook as their same-store sales crawled up just 1% — well below the projected 4.1% increase analysts anticipated.

• Lululemon’s new guidance assumes 30% incremental tariffs on China and 10% on remaining sourcing countries, with Vietnam (40% of production) among its largest manufacturing bases.
• The company expects second-quarter EPS of $2.85-$2.90, significantly below Wall Street’s forecast, while maintaining full-year revenue guidance of up to $11.3B.

Stretching for solutions: CFO Meghan Frank revealed plans for “strategic price increases, looking item by item across our assortment” to offset tariff impacts, though she emphasized these would be “modest” in nature on a limited product selection. The yoga wear outfit joins fellow store chains like Macy’sM

and Abercrombie & FitchANF

in cutting profit outlooks as trade uncertainty floods the retail environment. Despite the challenges, CEO Calvin McDonald believes Lululemon remains better positioned than most to navigate the current headwinds, banking on the brand’s pricing power and loyal customer base to stay resilient through the turbulence.