{"id":6145,"date":"2026-06-07T20:39:34","date_gmt":"2026-06-07T20:39:34","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=6145"},"modified":"2026-06-07T20:39:34","modified_gmt":"2026-06-07T20:39:34","slug":"lululemon-eyes-key-growth-market-and-its-not-the-u-s","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=6145","title":{"rendered":"Lululemon eyes key growth market and it's not the U.S."},"content":{"rendered":"
<\/p>\n
Over the past three decades, Lululemon<\/strong> has gone from a niche yoga-pants label to a mall anchor. For most of that run, U.S. sales drove the story.<\/p>\n
That’s no longer the case.<\/p>\n
The brand that built its name on American fitness studios and suburban storefronts is now leaning hard on a market half a world away. And the latest numbers show why.<\/p>\n
Why Lululemon’s U.S. slowdown matters for investors<\/strong><\/h2>\n
Lululemon (LULU) sits in a tricky spot. Its leggings and jackets cost a premium, and shoppers only pay up when they feel good about spending.<\/p>\n
Right now, many American shoppers don’t.<\/p>\n
In the first quarter (ended May 3), total revenue rose 4% to $2.5 billion. But that headline number hides a split.<\/p>\n
\n
North America revenue fell 3%.\u00a0<\/li>\n
In the U.S. specifically, sales dropped 4%.\u00a0<\/li>\n
Comparable sales in the Americas, a measure that strips out new stores, slid 6% on a constant-dollar basis.<\/li>\n<\/ul>\n
Translation: existing U.S. stores sold less than they did a year ago.<\/p>\n
Profit took a bigger hit, as Lululemon reported adjusted earnings of $1.69 per share, down from $2.60 per share in the year-ago period.\u00a0<\/p>\n
More Retail Stocks:<\/strong><\/h3>\n
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You won\u2019t believe what Coca-Cola just did with its coffee brand<\/strong><\/li>\n
Costco reveals a new approach that could reshape the chain<\/strong><\/li>\n
Shoppers furious at grocery chain\u2019s new anti?theft rule<\/strong><\/li>\n<\/ul>\n
Gross margin fell 410 basis points to 54.2%, primarily due to tariffs and markdowns.<\/p>\n
Interim Co-CEO Meghan Frank pointed to two culprits during the earnings call.\u00a0<\/p>\n
First, a wave of negative media and social media commentary hurt store traffic. Second, some new product launches simply didn’t land.<\/p>\n
“Not all of our product launches have met our expectations,” Frank said.<\/p>\n
She added that a recent “new look of yoga” campaign drew interest but failed to lift the rest of the lineup.<\/p>\n
Lululemon turns to China for growth<\/strong><\/h2>\n
For some good news, Lululemon looks to China, where China Mainland revenue jumped 30% in the quarter, or 23% after adjusting for currency swings. Comparable sales there rose 13% on a constant-dollar basis.<\/p>\n
A shift in the timing of the Chinese New Year added roughly eight percentage points to the figure. Even so, the gap with the U.S. is striking.<\/p>\n
Put plainly: while American shoppers pulled back, Chinese shoppers leaned in.<\/p>\n
Lululemon’s China Mainland segment posted a 42.4% operating margin last quarter, making it the company\u2019s most profitable region by a wide margin.<\/p>\n
Related: One of the world\u2019s largest fashion retailer closes 106 stores<\/strong><\/p>\n
For the full year, Lululemon expects China to grow about 20% and expects North America to fall in the high single digits.<\/p>\n
The athleisure giant is putting its money where its forecast is.<\/p>\n
Of the 25 to 30 international stores planned for 2026, the majority will open in China, the company said. Lululemon ended the quarter with 173 stores there.<\/p>\n
It’s also spending on splashy events to build buzz. <\/p>\n
Last week, more than 2,000 guests practiced yoga on the Great Wall of China at a flagship brand event, Co-CEO Andre Maestrini said on the call. <\/p>\n
A sixth annual “Summer Sweat Games” run-and-train series kicks off later this summer.<\/p>\n
China wasn’t completely immune to the noise, though. Frank said negative commentary hit the market hardest in late April and early May, then faded.<\/p>\n
Maestrini explained:<\/p>\n
“As the brand noise has begun to dissipate, we continue to engage with guests in new and unique ways.\u201d<\/p>\n\n
China has become an increasingly important market for Lululemon.<\/p>\n
What comes next for Lululemon<\/strong> stock<\/h2>\n
The broader picture is one of a company in transition.<\/p>\n
Lululemon cut its full-year revenue outlook to a range of $11 billion to $11.15 billion. That’s flat to down 1% from last year.\u00a0<\/p>\n
It also lowered its earnings forecast to $10.95-$11.15 per share, down from $13.26 per share in 2025.<\/p>\n
There’s a leadership change coming, too. Incoming CEO Heidi O’Neill joins in September, after a stretch of interim co-CEOs.<\/p>\n
To fight the U.S. slump, the company is chasing 20% more product volume than last year. That lets it restock hot sellers faster.\u00a0<\/p>\n
It’s also reducing store clutter by trimming 15% of the items on display, so new styles stand out.<\/p>\n
And it’s spending more to win attention. Marketing expenses will rise to roughly 6%-6.5% of sales, up from 5.6% last year.<\/p>\n
Shoppers have noticed Lululemon’s stores feel cleaner and less crowded with product than they did a year ago. That’s by design.<\/p>\n
Whether that’s enough to revive the American business is the open question. For now, the company’s clearest growth engine isn’t at home. It’s in China.<\/p>\n
Related: Lululemon brings back leggings after backlash, warns customers<\/strong><\/p>\n
Over the past three decades, Lululemon has gone from a niche yoga-pants label to a mall anchor. For most of that run, U.S. sales drove the story. That’s no longer… <\/p>\n","protected":false},"author":1,"featured_media":6146,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[2710,581,953,510,6021,33,599],"class_list":["post-6145","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-eyes","tag-growth","tag-it039s","tag-key","tag-lululemon","tag-market","tag-u-s"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/6145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6145"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/6145\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/6146"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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