Core Viewpoint - Lululemon has significantly lowered its financial forecasts for fiscal year 2025 due to the impact of U.S. tariffs, leading to a sharp decline in its stock price and multiple investment banks adjusting their target prices downward [1][3][4]. Financial Performance - For the second quarter of fiscal year 2025, Lululemon reported revenue of $2.525 billion, a year-over-year increase of 6.5%, while net profit decreased by 5% to $371 million [4]. - The company now expects annual net revenue to be between $10.85 billion and $11 billion, down from previous estimates of $11.15 billion to $11.3 billion, and below market expectations of $11.2 billion [3][4]. - Earnings per share are projected to be between $12.77 and $12.97, significantly lower than the analyst expectation of $14.40 [3][4]. Impact of Tariffs - The increase in U.S. import tariffs and the cancellation of the "de minimis" exemption are expected to reduce Lululemon's gross profit by approximately $240 million [4]. - The U.S. government announced on July 30 that it would suspend the tax exemption for imports valued at $800 or less, affecting many of Lululemon's online orders shipped from Canada [4]. Market Conditions - Lululemon's comparable store sales in the Americas fell by 4% in the second quarter, attributed to weak demand in the North American market and increased competition from younger brands like Alo Yoga and Vuori [4][5]. - The overall performance of the athletic apparel market is under pressure, with Lululemon no longer seen as a market challenger but rather as a target for competitors [5]. Broader Industry Context - Other major brands, such as Adidas and Nike, are also facing challenges due to U.S. tariffs, with Adidas reporting significant losses and Nike planning layoffs amid declining revenues [5][6].

Core Viewpoint - The article highlights the significant impact of U.S. tariff policies on lululemon's financial performance, leading to a substantial drop in its stock price and downward revisions of its earnings and sales forecasts for fiscal year 2025 [1][2][4]. Financial Performance - lululemon's projected net revenue for the fiscal year 2025 is between $10.85 billion and $11 billion, down from a previous forecast of $11.15 billion to $11.3 billion, and below market expectations of $11.2 billion [4]. - The company expects earnings per share to be between $12.77 and $12.97, significantly lower than analyst expectations of $14.40 and previous guidance of $14.58 to $14.78 [4]. - In the second fiscal quarter, lululemon reported revenue of $2.525 billion, a year-over-year increase of 6.5%, while net profit decreased by 5% to $371 million [4]. Market Impact - The stock price of lululemon fell by as much as 20% during trading, closing down 18.58% following the earnings report [2][4]. - Year-to-date, lululemon's stock has declined by 46%, resulting in a market capitalization loss of over $20 billion [1]. Competitive Landscape - lululemon's core business in North America is under pressure, with comparable store sales in the Americas declining by 4% in the second quarter [5]. - The company faces increased competition from emerging brands like Alo Yoga and Vuori, which are capturing market share [5]. Broader Industry Context - The article notes that other major brands, such as Adidas and Nike, are also experiencing challenges due to U.S. tariff policies, with Adidas reporting significant losses and Nike planning layoffs [5][6]. - The overall apparel industry is feeling the effects of rising costs due to tariffs, which are expected to continue impacting consumer prices and spending [7][8].

Group 1 - The core viewpoint of the article is that lululemon reported a 7% year-over-year increase in global net revenue for Q2 of fiscal year 2025, reaching $2.5 billion, with international revenue growing by 22% [1] - For Q3 of fiscal year 2025, lululemon expects net revenue to be between $2.47 billion and $2.5 billion, representing a growth of approximately 3% to 4% [1] - The company projects full-year net revenue for fiscal year 2025 to be between $10.85 billion and $11 billion, indicating a growth of about 2% to 4%, or 4% to 6% when excluding the 53rd week of 2024 [1] Group 2 - The expected diluted earnings per share for Q3 of fiscal year 2025 is projected to be between $2.18 and $2.23 [1] - For the full fiscal year 2025, lululemon anticipates diluted earnings per share to be between $12.77 and $12.97 [1]