Lululemon shares fell almost 20% after the company warned tariffs and consumer caution would hurt profits.
Here are some of my bold statements about this:
Tariffs are sector-wide, not Lululemon-specific
Nearly all premium athletic and apparel brands—Nike, Adidas, Under Armour, VF Corp (The North Face), Alo Yoga, Vuori—rely on Asia-based manufacturing, especially China and Vietnam.
This means everyone faces the same cost inflation, and no brand gains a unique cost advantage from the tariff hit.
Lululemon has superior margin cushion
LULU has ~58–59% gross margins, which is well above peers like Nike (~44%) or Under Armour (~46%).
This gives Lululemon more flexibility to absorb or pass on costs than competitors.
Loyal customer base allows for price elasticity
Lululemon’s brand power, community focus, and premium positioning give it pricing power. Consumers are often less price-sensitive.
Modest price increases (e.g. $5–10 on leggings) may not meaningfully affect demand—especially compared to fast fashion retailers.
And some points about performance of the business:
Forward P/E now ~18×, down from its historical 30–35× range—this marks a meaningful valuation discount relative to its growth profile
International comparable sales surged: +39% in China, +25–36% in rest-of-world markets recently
Executed ~$1 billion in stock repurchases recently, with ample remaining capacity—supports EPS and investor confidence
Multiple firms (Bernstein, Raymond James, TD Cowen, Needham, Baird) maintain Buy/Outperform ratings with targets in the $420–475 range
For LULU´s 1Q official report visit: corporate.lululemon.com/media/press-releases/2025/06-05-2025-210525682
Here are some of my bold statements about this:
Tariffs are sector-wide, not Lululemon-specific
Nearly all premium athletic and apparel brands—Nike, Adidas, Under Armour, VF Corp (The North Face), Alo Yoga, Vuori—rely on Asia-based manufacturing, especially China and Vietnam.
This means everyone faces the same cost inflation, and no brand gains a unique cost advantage from the tariff hit.
Lululemon has superior margin cushion
LULU has ~58–59% gross margins, which is well above peers like Nike (~44%) or Under Armour (~46%).
This gives Lululemon more flexibility to absorb or pass on costs than competitors.
Loyal customer base allows for price elasticity
Lululemon’s brand power, community focus, and premium positioning give it pricing power. Consumers are often less price-sensitive.
Modest price increases (e.g. $5–10 on leggings) may not meaningfully affect demand—especially compared to fast fashion retailers.
And some points about performance of the business:
Forward P/E now ~18×, down from its historical 30–35× range—this marks a meaningful valuation discount relative to its growth profile
International comparable sales surged: +39% in China, +25–36% in rest-of-world markets recently
Executed ~$1 billion in stock repurchases recently, with ample remaining capacity—supports EPS and investor confidence
Multiple firms (Bernstein, Raymond James, TD Cowen, Needham, Baird) maintain Buy/Outperform ratings with targets in the $420–475 range
For LULU´s 1Q official report visit: corporate.lululemon.com/media/press-releases/2025/06-05-2025-210525682
交易進行
I just bought LULU Jun27'25 265 Call9.00USD/stock
註釋
Looks like Honolulu will not be a cheap holiday. Stock keeps drowning.
3 Analysts updated performance target after Q1 results as follows:
CICC Research 280 USD
Barclays 270 USD
Morgan Stanley 280 USD
More reading here: marketbeat.com/instant-alerts/lululemon-athletica-nasdaqlulu-price-target-cut-to-27000-by-analysts-at-barclays-2025-06-09/
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