Lululemon Cuts Forecasts Amid Consumer Spending Slowdown and Tariff Pressures

Lululemon Athletica slashed its annual revenue and profit forecasts, signaling weakening demand as inflation-weary consumers pull back on spending. The company's shares plummeted 13% following the announcement, reflecting broader concerns about discretionary retail spending during the critical holiday season.

The sportswear retailer now expects annual revenue of $10.85-$11 billion, down from previous guidance of $11.15-$11.3 billion. Earnings projections were cut to $12.77-$12.97 per share from $14.58-$14.78. Tariff impacts, including the loss of 'de minimis' exemptions, are expected to reduce gross margins by approximately $240 million.

This downturn comes as PwC forecasts the steepest decline in U.S. holiday spending since the pandemic, with Gen Z consumers leading the pullback. The company's product innovations have failed to overcome macroeconomic headwinds created by persistent inflation and trade policy volatility.