From Downward Dog to Downward Stock: Lululemon’s Fall
Weak demand at home, rising tariff costs abroad, and a bruised investor mood leave Lululemon stumbling into the holiday season.

Lululemon Athletica’s recent earnings call revealed the kind of storm clouds retailers dread heading into the most crucial stretch of the year. The Canadian athleisure giant, once heralded as unstoppable, now finds itself facing slowing U.S. demand and painful tariff pressures that have investors questioning its growth story. Shares tumbled nearly 20% in pre-market trading, adding to a bruising year that has already wiped out 40% of the company’s market value.
A Bleak Holiday Picture
The holiday season is typically a golden quarter for Lululemon. This year, however, executives painted a far more cautious picture. The company cut its sales and profit forecasts for 2025, citing fatigue among U.S. consumers and heavier costs tied to tariffs. The end of the “de minimis” exemption, which had allowed duty-free entry of shipments under $800, has dealt a direct blow to its supply chain. Lululemon estimates the hit at $240 million this year, rising to as much as $320 million in 2026.
For a brand built on premium positioning, absorbing such costs without alienating its price-sensitive base will prove difficult. Lululemon has raised prices in the past with little pushback, but the economic backdrop today is less forgiving. Inflationary pressures and rising interest rates have left shoppers wary of spending freely on discretionary items like yoga gear and lifestyle apparel.
