Lululemon shares have plunged by more than 20% after it cut its annual profit forecast, as the company navigates tariffs and fears about the US economy slowing.
“We experienced lower store traffic in the Americas, partially reflective of economic uncertainty, inflationary pressures, lower consumer confidence, and changes in discretionary spending,” Lululemon said in a statement.
The athleisure brand joins a growing list of big companies to warn about the impact of US President Donald Trump’s trade policies.
The Trump administration’s approach to tariffs has triggered concerns over rising prices and a weakening economy.
“We are planning to take strategic price increases… on a small portion of our assortment, and they will be modest in nature,” Lululemon’s finance chief Meghan Frank said.
The company also said it will cut costs and negotiate with its vendors.
Last year, 40% of its products were made in Vietnam, and 28% of its fabrics came from mainland China.
Clothing and footwear brands are among the businesses hit hardest by tariffs as they make goods in Asian countries, which have faced steep levies from the US.
In April, sportswear giant Adidas warned that import taxes imposed by Trump will lead to higher prices in the US for popular trainers including the Gazelle and Samba.
“Since we currently cannot produce almost any of our products in the US, these higher tariffs will eventually cause higher costs for all our products for the US market,” chief executive Bjorn Gulden said.
Also in April, footwear maker Skechers withdrew its annual results forecast, citing economic uncertainty.
“The current environment is simply too dynamic from which to plan results with a reasonable assurance of success,” Skechers’ chief operating officer, David Weinberg, told investors in a post-earnings call.
Last month, Nike said it would raise prices on some trainers and clothing in the US from early June.
The sportswear giant did not name US tariffs explicitly as a reason for the increase, saying it regularly made “price adjustments”.
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