Retail Stocks LULU and TGT Face Challenges but Show Turnaround Potential
Lululemon (LULU) and Target (TGT), once Wall Street darlings, have seen their stocks plummet over 40% in the past year amid weak U.S. demand, trade cost pressures, and cautious consumer spending. Both companies, however, are demonstrating resilience through strategic adaptations.
Lululemon's Q2 2025 revenue grew 7% to $2.5 billion, driven by a 22% surge in international markets like China, offsetting stagnant U.S. growth. Despite earnings dipping to $3.10 per share, the brand’s global appeal and product innovation signal long-term potential.
Target, meanwhile, is leaning into digital services and advertising to counter soft discretionary spending. Both firms highlight the broader retail sector’s struggle with tariffs and economic uncertainty—yet their proactive pivots suggest undervalued opportunities for patient investors.
