Lululemon shares drop 15% as CEO says inflation, economic concerns are weighing on spending
Lululemon beat Wall Street expectations for fiscal fourth-quarter earnings and revenue, but issued 2025 guidance that disappointed analysts.
Lululemon beat Wall Street expectations for fiscal fourth-quarter earnings and revenue, but issued 2025 guidance that disappointed analysts.
On an Thursday earnings call, CEO Calvin McDonald said the athleticwear company conducted a survey earlier this month that found that consumers are spending less due to economic and inflation concerns, resulting in lower U.S. traffic at Lululemon and industry peers. However, he said, shoppers responded well to innovation at the company.
“There continues to be considerable uncertainty driven by macro and geopolitical circumstances. That being said, we remain focused on what we can control,” McDonald said.
Shares of the apparel company plunged 15% on Friday morning.
Lululemon was only the latest retailer to say it expects slower sales for the rest of this year as concerns grow about a weakening economy and President Donald Trump’s tariffs. Even so, the Canada-based company said it expected only a minimal hit to profits from the U.S. trade war with countries including Canada, Mexico and China.
Rating: 5