• Investing
  • Stock
  • Economy
  • Editor’s Pick
Portfolio Performance Today
Stock

Beyond tariffs: Lululemon stock’s bigger problem is growth fatigue at home

by June 7, 2025
by June 7, 2025

Lululemon Athletica Inc (NASDAQ: LULU) opened some 30% down on Friday after reporting in-line financials for its fiscal Q1 but leaving investors unsatisfied with the forward guidance.

LULU shares are being punished this morning as the market digests clear signs of slowing growth, especially in its key North American market.

While macro headwinds like tariffs remain a concern, experts believe a bigger problem facing the athleisure giant this year may be saturation in the US and Canada.

Growth is plateauing in its core regions, and Lululemon’s big bet on China as its next engine for expansion may prove to be riskier than initially hoped.

Including today’s plunge, LULU stock is down more than 35% versus its year-to-date high.

LULU shares hit by slowing North American momentum

According to David Swartz, senior equity analyst at Morningstar, Lululemon saw weakness in its North American comparable sales in the first quarter as the retail giant has already reached maturity in the region.

“LULU already has stores in all major metropolitan regions in the US and Canada. It was almost a certainty that it would not be able to post the same kind of growth rates that it had in the past.”

Lululemon stock’s recent performance suggests it’s grappling with a combination of increased competition from brands like Alo Yoga and Vuori, and internal challenges, including a shakeup in its design leadership.

After the departure of its former head designer last year, the athletic apparel company has been navigating a transitional period that may have impacted product innovation and merchandising, Swartz argued in an interview with Yahoo Finance on Friday.

Lululemon stock faces risk in China expansion strategy

To counter the flattening growth at home, Lululemon has turned its attention abroad, especially to China, where it’s been rapidly opening new stores.

But the bet on China is looking increasingly precarious amid ongoing economic turbulence.

“China is a troubled market right now,” Swartz noted, pointing to weak consumer sentiment, high youth unemployment, and soft results across the apparel sector as warning signs.

While Lululemon’s brand awareness and market share in China remain low, leaving room for expansion, current conditions suggest that international growth may not accelerate fast enough to offset domestic stagnation.

All in all, the Morningstar analyst agreed Lululemon remains fundamentally well-positioned despite tariff-related headwinds, thanks to its pricing power and relatively limited manufacturing exposure to China.

However, he cautioned that the stock is unlikely to recover meaningfully unless the company either reignites growth in its core Americas segment or identifies a high-growth international market to scale into.

Still, Swartz maintains a $315 fair value estimate for the stock, implying roughly 20% upside from current levels.

That suggests the sharp post-earnings selloff may have been overdone, even as near-term challenges persist for the Vancouver-based athleticwear brand.

The post Beyond tariffs: Lululemon stock’s bigger problem is growth fatigue at home appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Gemini crypto exchange planning to go public following Circle’s IPO success
next post
Trump-Musk feud could end up helping Tesla stock, Tom Lee predicts

Related Posts

Asia markets open: Nikkei hits 51,000 for the...

October 29, 2025

Morning brief: AWS’s $5B South Korea plan; Trump...

October 29, 2025

US retail power prices soar: data centers and...

October 29, 2025

China resumes US soybean imports as trade deal...

October 29, 2025

Amazon’s AWS to fuel South Korea’s AI hub...

October 29, 2025

Visa expands stablecoin network across four blockchains

October 29, 2025

US–China trade talks shift focus to AI chips,...

October 29, 2025

Europe markets open: Stocks flat as Fed looms;...

October 29, 2025

Banijay to acquire majority stake in Tipico creating...

October 28, 2025

Cathie Wood warns investors to brace for correction,...

October 28, 2025

Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.

By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

Recent Posts

  • Parks Associates Examines Edge AI Innovations in Evolving IoT Ecosystem

    October 29, 2025
  • Cowboy Diplomacy: Ranchers Reject Tariff Rhetoric

    October 29, 2025
  • We Have Never Been Austere

    October 29, 2025
  • Asia markets open: Nikkei hits 51,000 for the first time; Sensex jumps 100 points

    October 29, 2025
  • Morning brief: AWS’s $5B South Korea plan; Trump on Kim meet; Oil steady

    October 29, 2025
  • US retail power prices soar: data centers and supply constraints drive up costs

    October 29, 2025

Editors’ Picks

  • 1

    Meta executives eligible for 200% salary bonus under new pay structure

    February 21, 2025
  • 2

    Pop Mart reports 188% profit surge, plans aggressive global expansion

    March 26, 2025
  • 3

    New FBI leader Kash Patel tapped to run ATF as acting director

    February 23, 2025
  • 4

    Walmart earnings preview: What to expect before Thursday’s opening bell

    February 20, 2025
  • 5

    Cramer reveals a sub-sector of technology that can withstand Trump tariffs

    March 1, 2025
  • 6

    Anthropic’s newly released Claude 3.7 Sonnet can ‘think’ as long as the user wants before giving an answer

    February 25, 2025
  • 7

    Nvidia’s investment in SoundHound wasn’t all that significant after all

    March 1, 2025

Categories

  • Economy (3,045)
  • Editor's Pick (298)
  • Investing (185)
  • Stock (2,072)
  • About us
  • Contact us
  • Privacy Policy
  • Terms & Conditions

Copyright © 2025 Portfolioperformancetoday.com All Rights Reserved.

Portfolio Performance Today
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Portfolio Performance Today
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Copyright © 2025 Portfolioperformancetoday.com All Rights Reserved.

Read alsox

Dow Futures tumble 300 points amid renewed...

July 5, 2025

Bitcoin ETFs see over $600M in inflows...

October 3, 2025

Asia-Pacific stocks slide as Trump tariffs, Bank...

February 25, 2025