Lululemon Brand Check-up: Growing Abroad, Stalling at Home
Lululemon still grows. First-quarter revenue rose 7% to $2.4 billion. But the Vancouver-based brand has a problem at home: comparable sales in the Americas fell in fiscal 2024 and again in the first quarter of 2025. On June 5 it cut its profit outlook, and the shares lost about a fifth of their value the next day. Here is our check-up as of July 29, 2025.
Key takeaways
- Lululemon closed at $214.04 on July 29, 2025, 58% below its record close of $511.29 on December 29, 2023.
- Revenue is still growing, but Americas comparable sales fell 2% in the first quarter of fiscal 2025 while China Mainland revenue rose 21%.
- On June 5 the company kept its revenue forecast but cut its profit outlook, and the shares fell 19.8% the next day.
- The main work is at home: Lululemon has to give U.S. shoppers fresh reasons to pay a premium price.
Download the full Lululemon Brand Check-up (PDF): vital signs, timeline, diagnosis, treatment and sources.
The symptoms: growth abroad, softness at home
On paper, Lululemon is still a growing company. Revenue rose 10% to $10.6 billion in fiscal 2024. Most of that growth came from outside its largest market. Americas net revenue rose 4% for the year, and Americas comparable sales fell 1%. China Mainland revenue rose 41%.
The pattern held into 2025. In the first quarter, revenue rose 7% to $2.4 billion and comparable sales rose 1%. Americas comparable sales fell 2%, while China Mainland revenue rose 21%. A premium brand can live with one slow quarter. A home market where comparable sales keep slipping is a symptom we take seriously.
What the June 5 results showed
The company kept its full-year revenue forecast of $11.15 billion to $11.3 billion but cut its earnings forecast to $14.58 to $14.78 a share, from $14.95 to $15.15. Comparable sales growth of 1% compared with projections of 4.1%, according to Barron’s. The shares closed at $330.78 that day and $265.27 the next, a fall of 19.8%. Bloomberg reported that the drop put the stock on track for its biggest decline since March 2020.
Chief executive Calvin McDonald described the U.S. customer plainly: “In the U.S., consumers remain cautious right now and they are being very intentional about their buying decisions,” he said, as reported by Bloomberg.
Diagnosis: the brand has lost some pull in the U.S.
Cautious consumers explain part of the story. Reuters reported that Lululemon has struggled to keep shoppers despite new sports bra and athletic jacket styles, and that it faces intense competition from trendier and more affordable brands in North America and mainland China. Jefferies analyst Randal Konik said management continues to prioritize product newness and China expansion “over addressing a pullback from core customers and evident traffic declines.” He added: “We believe this misalignment is concerning.”
Newer rivals are part of the picture. In December 2024, CNBC reported Konik’s view that upstarts Vuori and Alo Yoga were taking share from Lululemon. It cited GlobalData figures: the share of Lululemon’s customers who shopped at Vuori grew from 1.2% in 2018 to 7.8% by the end of November 2024.
Price is the pressure point. Align yoga pants sell for up to $128 on Lululemon’s website, according to Reuters. A price like that needs a clear reason to choose the brand over cheaper options. When newness slows and rivals look fresher, that reason weakens. We see this as a brand positioning problem before it is a sales problem.
Tariffs squeeze the margin
Lululemon’s guidance assumed 30% tariffs on China and 10% on other countries, according to Bloomberg. Reuters noted that the tariffs reach some of its largest sourcing hubs: Vietnam, Cambodia and Sri Lanka. In its quarterly filing, the company said the tariffs imposed since April 2025 “could lead to a significant reduction in gross margin and income from operations.” Its answer includes price increases that chief financial officer Meghan Frank called “modest in nature.” For a brand already priced at the top of its category, a careful pricing strategy matters more than usual.
Where the share price stands
Lululemon closed at $214.04 on July 29, 2025. That is 17% below its close of $259.03 a year earlier and 58% below its record close of $511.29 on December 29, 2023. The share price is not the brand, but the fall suggests investors now expect less growth from it.
Treatment
We would start at home. First, rebuild the U.S. assortment around fewer, sharper new products and give each one proper launch support. Second, run a fresh competitor analysis on the brands winning North American shoppers, including what they offer at lower prices. Third, protect full price: explain clearly why the product is worth what it costs, so customers do not learn to wait for markdowns.
What growing companies can learn
Growth in new markets can hide weakness in the market that built you. Track your home market on its own, with comparable sales and repeat purchase, instead of blending it into a total. If your price is high, your value proposition needs renewing often. Customers who paid for newness stop paying when the newness slows.
This check-up uses public information available on July 29, 2025. It is brand and marketing analysis, not investment advice.
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