Lululemon Stretched by Tariffs, Macro

Here's our initial take on Lululemon Athletica's (NASDAQ: LULU) financial report.

Key Metrics

Americas Sales Slow As Pressure Builds

Athletic apparel specialist Lululemon beat Wall Street top- and bottom-line expectations for the quarter, delivering 7.3% revenue growth and a slight uptick in earnings per share. But CEO Calvin McDonald warned of a "dynamic macroenvironment" that the company expects to weigh on results in the quarters to come.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

First, the good news. Revenue growth came in toward the top of Lululemon's guidance, fueled by strong 6% international comparable sales. Overall international net revenue increased by 19%, or 20% when adjusted for currency fluctuations. But Americas comp sales were down 2% and overall revenue was up by just 3%, pressured by an uncertain American consumer.

Lululemon does not expect those pressures to ease in the months to come. The company cut its full-year guidance, saying it now expects to earn between $14.58 and $14.78 per share. That's down from its previous $14.95 to $15.15 per share guidance, and below Wall Street's $14.89 consensus estimate.

Immediate Market Reaction

The somber tone and cut guidance appeared to have caught investors off guard. Lululemon shares, already down 11% for the year heading into earnings, were down 20% in after-hours trading ahead of the New York open Friday.

What to Watch

McDonald pledged to "leverage our strong financial position and competitive advantages to play offense, while we continue to invest in the growth opportunities in front of us." Lululemon has the wherewithal to weather this storm, but there is only so much the company can do in this environment.

Chief financial officer Meghan Frank, on the post-earnings call, said the company is looking to take "strategic price increases" to mitigate the impact of tariffs, as well as evaluating sourcing options. But any efficiency gains made will take time to play out.

The good news for investors is Lululemon market share held up well in a rough environment, which implies there is nothing wrong with the brand. But until there is more certainty on the macro front, Lululemon stock could be stuck in neutral.

Helpful Resources

• Full earnings report
• Investor relations page
• Additional coverage

Should you invest $1,000 in Lululemon Athletica Inc. right now?

Before you buy stock in Lululemon Athletica Inc., consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $858,011!*

Now, it’s worth noting Stock Advisor’s total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.