Franklin Street Advisors Exits $22.8 Million Lululemon Stake As Apparel Stock Slides

Core Insights - Franklin Street Advisors sold its entire position in Lululemon Athletica for an estimated $22.8 million during the third quarter, liquidating 95,891 shares [2][7] - Lululemon's stock price is currently $174.09, reflecting a 36% decline over the past year, significantly underperforming the S&P 500, which has increased by 16% in the same period [3][7] Company Overview - Lululemon Athletica is a leading global retailer in athletic apparel with a strong e-commerce platform, focusing on expanding its omnichannel footprint [6][10] - The company has a market capitalization of $20 billion, with a trailing twelve months (TTM) revenue of $10.9 billion and a net income of $1.8 billion [4] Financial Performance - In its second-quarter 2025 results, Lululemon reported a 7% year-over-year revenue increase to $2.5 billion, driven by a 22% growth in international sales, while sales in the Americas rose only 1% with comparable sales down 4% [8][11] - Operating income fell by 3%, and profit margins contracted by 210 basis points to 20.7% [11] - The company anticipates modest revenue growth of 3% to 4% for the third quarter and has warned that higher tariffs could reduce annual gross profits by approximately $240 million [12] Investor Sentiment - The decision by Franklin Street Advisors to liquidate its position indicates growing investor concerns regarding Lululemon's slowing U.S. growth and declining profitability [7] - The stock's recent pullback may present an opportunity for investors, contingent on management's ability to execute a turnaround and enhance global momentum to counter domestic weaknesses [12]