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.
The Trump administration’s approach to tariffs has triggered concerns over rising prices and a weakening economy.
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.
The sportswear giant did not name US tariffs explicitly as a reason for the increase, saying it regularly made “price adjustments”.
Amid tariffs and concerns about the slowing US economy, Lululemon’s stock has fallen more than 20% since lowering its yearly profit forecast.
“In the Americas, we saw a decrease in store traffic, which was partly caused by changes in discretionary spending, inflationary pressures, lower consumer confidence, and economic uncertainty,” Lululemon said in a statement.
The athleisure brand is one of many large corporations warning about the effects of US President Donald Trump’s trade policies.
The tariff policies of the Trump administration have raised worries about price increases and a faltering economy.
“We intend to strategically raise prices. on a tiny percentage of our inventory, and they will be modest in size,” stated Meghan Frank, the finance chief at Lululemon.
Along with cutting expenses, the company promised to bargain with its suppliers.
Last year, mainland China supplied 28% of its fabrics, while Vietnam produced 40% of its goods.
Because they manufacture their products in Asian nations that have been subject to high tariffs from the US, clothing and footwear brands are among the companies most severely impacted by tariffs.
The sportswear behemoth Adidas issued a warning in April that Trump’s import taxes would raise the cost of well-known sneakers like the Gazelle and Samba in the US.
Chief Executive Bjorn Gulden stated, “These higher tariffs will eventually cause higher costs for all our products for the US market, since we currently cannot produce almost any of our products in the US.”.
Skechers, a footwear company, retracted its annual results forecast in April as well, citing economic uncertainty.
David Weinberg, the chief operating officer of Skechers, informed investors during a call following the company’s earnings that “the current environment is simply too dynamic from which to plan results with a reasonable assurance of success.”.
Nike announced last month that it would start raising the price of some sneakers and apparel in the United States in early June.
Despite claiming that it frequently made “price adjustments,” the sportswear giant did not specifically attribute the increase to US tariffs.
