Lululemon Shares Tumble Over 20% Amid Economic Jitters and Tariff Pressures

Lululemon has seen its stock price plummet by more than 20% following a downward revision of its annual profit forecast, as the athleisure brand faces mounting pressure from U.S. tariffs and a sluggish economic outlook.

In a statement released to investors, the company pointed to declining foot traffic in its American stores, attributing it to a combination of economic uncertainty, rising inflation, reduced consumer confidence, and a shift in discretionary spending habits.

The retailer’s warning adds to a growing chorus of major brands sounding the alarm over the impact of former President Donald Trump’s trade policies, particularly the ongoing tariff regime, which has raised costs for import-heavy sectors such as apparel and footwear.

Meghan Frank, Lululemon’s chief financial officer, said the company is planning modest price increases on a limited selection of its products to help offset cost pressures. She also outlined plans to reduce operating costs and renegotiate supplier agreements.

Lululemon remains heavily reliant on production in Asia, with 40% of its products manufactured in Vietnam and nearly a third of its fabric sourced from China – two countries heavily affected by U.S. import duties.

Tariffs have significantly affected clothing and footwear companies, many of which have long relied on Asian manufacturing hubs. In recent months, several industry leaders have warned of higher prices and operational disruptions.

In April, Adidas flagged that U.S. tariffs would lead to price hikes on popular sneakers like the Gazelle and Samba. CEO Bjorn Gulden stressed that because the company cannot easily shift production to the U.S., additional levies would inevitably drive up costs for American consumers.

Skechers also withdrew its annual forecast in April, citing the volatile economic landscape. “The current environment is simply too dynamic to make confident projections,” said COO David Weinberg in a call with investors.

Meanwhile, Nike announced plans to raise U.S. prices on select footwear and apparel starting in June, though it did not specifically cite tariffs as the reason, describing the move instead as part of routine pricing adjustments.

As consumer spending tightens and trade tensions linger, retailers like Lululemon are being forced to adapt quickly – balancing cost controls, pricing strategies, and supply chain management in an unpredictable market.