Lululemon Stock Drops 15% Following Weak 2025 Guidance Despite Strong Q4 Results

The athleisure giant cites inflation, tariffs, and cautious consumer spending as key challenges while focusing on international growth and innovation.

Lululemon exceeded Q4 2024 expectations with $3.61 billion in revenue and $6.14 earnings per share, but its fiscal 2025 guidance disappointed analysts.
The company forecasts 2025 revenue between $11.15 billion and $11.30 billion, below Wall Street's $11.31 billion estimate, and earnings per share of $14.95 to $15.15, missing the $15.31 projection.
Shares fell 15%, marking one of the largest single-day declines in recent years, as investors reacted to the weaker outlook and macroeconomic challenges.
CEO Calvin McDonald highlighted inflation, tariffs, and economic uncertainty as factors dampening U.S. consumer spending, with flat comparable sales in the Americas but 20% growth internationally.
Lululemon plans to focus on its 'Power of Three ×2' growth strategy, aiming to double revenue by 2026, with a significant emphasis on expanding its footprint in China.