Lululemon’s US struggles weigh on sales outlook for the year

Lululemon Athletica Inc. delivered a disappointing outlook for the year ahead amid slower US sales for the yogawear brand.

The retailer expects fiscal year sales to be in the range of $11.15 billion to $11.3 billion, lower than Wall Street analysts anticipated. The outlook for first-quarter revenue also missed expectations. 

Chief Executive Officer Calvin McDonald is working to lift demand by expanding the brand’s product assortment and entering new categories, adding gear for sports like golf, tennis and running. The brand has been contending with fluctuating fashion trends, trying to adapt to shoppers that prefer looser clothes rather than the form-fitting clothes that are the brand’s hallmark.

Chief Financial Officer Meghan Frank acknowledged that the company is trying to navigate “ongoing macro uncertainties.”

McDonald laid out a long-term strategic plan three years ago that called for doubling sales to $12.5 billion by 2026. The company is sticking by that plan for next year, but increased competition has slowed growth, especially in North America. 

The overseas business has performed better. In the fourth quarter that ended Feb. 2, comparable international sales rose 22%. By comparison, the Americas business was flat.

The Vancouver-based company is facing concerns about consumer spending and supply chain costs amid an escalating trade war between President Donald Trump and countries around the world. Lululemon has most of its goods manufactured in Asia, including in Vietnam, Cambodia and Sri Lanka, according to regulatory filings.

The shares fell 6.6% in extended trading at 4:19 p.m. New York time. The stock had fallen 11% this year through Thursday’s close.