Lululemon shares slide as tariffs and weaker sales take their toll
Summary
Lululemon's stock price dropped significantly after the company announced that U.S. tariffs and the end of a duty-free exemption would cost it around $240 million this year. The company reduced its sales forecast for the next quarter due to these changes and is exploring ways to adjust its supply chain and reduce costs. Lululemon is experiencing strong sales internationally but weaker performance in the U.S.Key Facts
- Lululemon's stock fell by more than 15% in extended trading in New York.
- U.S. tariffs and the removal of a duty-free exemption will cost Lululemon about $240 million this year.
- The company reduced its sales forecast to $2.47 billion to $2.5 billion for the next three months.
- The removal of the duty-free exemption affects Lululemon’s U.S. e-commerce shipments.
- Lululemon is adjusting its supply chain and trying to cut costs to handle the impact of tariffs.
- The company has strong sales overseas but is disappointed with U.S. sales.
- Lululemon plans to make modest price increases due to rising costs.
- Most of Lululemon’s products are manufactured in Asian countries, which are heavily affected by U.S. tariffs.
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