Lululemon’s Stock Plunges 20% As Guidance Is Cut

Lululemon’s (LULU) stock is down 20% after the Canadian athletic apparel maker lowered is full-year earnings guidance, citing a “dynamic macroenvironment.”The Vancouver-based company reported first-quarter financial results that narrowly topped Wall Street estimates. Earnings per share (EPS) of $2.60 U.S. was ahead of the $2.58 U.S. expected among analysts. Revenue of $2.37 billion U.S. narrowly beat the consensus estimate of $2.36 billion U.S. Lululemon’s gross margin was 58.3%, ahead of the 57.7% that analysts had expected.Unfortunately, the decent results have been overshadowed by Lululemon’s guidance cut. Management lowered their full-year earnings outlook, saying they now expect EPS of $14.58 U.S. to $14.78 U.S. Previously, the company forecast full-year earnings of $14.95 U.S. to $15.15 U.S. Analysts were looking for earnings of $14.89 U.S. for all of 2025.Lululemon said that it is navigating a tricky environment due to uncertainty surrounding U.S. President Donald Trump’s tariff regime. Lululemon is vulnerable to import tariffs as much of its clothing and footwear is manufactured in foreign countries. In 2024, 40% of the company’s products were made in Vietnam.Lululemon does not own or operate any manufacturing facilities of its own and relies on suppliers to produce its products, including its popular yoga pants. Prior to today (June 6), the stock of Lululemon had declined 11% this year to trade at $330.78 U.S. per share.