Lululemon is facing a pivotal moment in 2025. The brand, renowned for its premium activewear, is grappling with significant challenges that could reshape its trajectory in the coming months.
Financial performance and outlook
In Q2 2025, Lululemon reported a revenue of $2.37 billion, marking a 7.3% increase from the previous year. Net income rose by 15% to $392.9 million, with a profit margin of 17% . However, the company has revised its full-year earnings per share (EPS) forecast to a range of $14.58 to $14.78, down from the earlier projection of $14.95 to $15.15 . This adjustment reflects the impact of increased tariffs and slowing demand.
Tariff challenges
Approximately 86% of Lululemon’s products are manufactured in countries affected by U.S. tariffs, with an average blended tariff rate of 39% . The company estimates that fully passing these costs onto consumers would necessitate price hikes of 11% to 12%, which may not be feasible without risking customer loyalty .
Legal disputes
Lululemon has filed a lawsuit against Costco, alleging the sale of counterfeit versions of its products under the Kirkland Signature brand. The company claims that these imitations infringe on its intellectual property and have caused consumer confusion .
Market performance
As of July 3, 2025, Lululemon’s stock is trading at $247.68, with a market capitalization of approximately $32 billion. The price-to-earnings (P/E) ratio stands at 18.14, and the earnings per share (EPS) is 14.7 .
Bullish case
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Strong brand loyalty and premium pricing power.
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Expansion into men’s apparel and accessories.
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Resilience in past supply chain disruptions.
Bearish case
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Significant exposure to tariff impacts.
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Potential for reduced consumer spending.
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Legal challenges affecting brand reputation.
Social media sentiment
Discussions around Lululemon on platforms like Twitter and Reddit indicate a cautious optimism among investors, with many awaiting resolution of the tariff issues and legal disputes.
Trading levels
Key support levels are around $240, with resistance near $260. A breakout above $260 could signal a potential upward trend.
Sources:
https://finance.yahoo.com/news/lululemon-athletica-second-quarter-2025-133108153.html
https://www.wsj.com/business/retail/lululemon-sues-costco-over-alleged-knockoff-activewear-b9a13284
https://www.macrotrends.net/stocks/charts/LULU/lululemon-athletica-inc/stock-price-history
https://www.macrotrends.net/stocks/charts/LULU/lululemon-athletica-inc/revenue