The news: Lululemon beat earnings expectations and met revenue forecasts in Q1, but softening demand in its core Americas market and a cut to its profit guidance cast a shadow over the results.
The numbers:
In response to the softening demand, the company trimmed its full-year earnings guidance to $14.58 to $14.78 per share, down from $14.95 to $15.15.
The context: A mix of macroeconomic headwinds and intensifying competition is making it harder for lululemon to deliver on CEO Calvin McDonald’s goal of doubling 2021 sales by 2026. While the brand has expanded into categories like running and tennis to fuel growth, rivals such as Alo Yoga and Vuori are gaining traction, and consumer tastes continue to shift.
Our take: Even premium brands aren’t immune to macro pressures. As consumers grow increasingly cost-conscious, discretionary purchases—especially those with big price tags—are easy for consumers to postpone.
Lululemon’s challenge now is not just product innovation, but convincing shoppers its value proposition is worth the premium.
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