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Lululemon Faces Margin Drop Amid Weak Demand, Tariffs

9/23/2025

41 9 Full Breakdown

Summary

Story summary

Q2 2025: lululemon's gross margin fell 110 bps to 58.5% due to markdowns and tariffs amid weak U.S. demand.
EPS $3.10 beat estimates; revenue $2.53B missed amid flat U.S. sales and 3% comps.
Tariffs expected to shave 220 bps from 2025 gross margin; outlook now implies 300 bps decline.
Shares down 54.7% YTD; Zacks expects 11.1% lower fiscal 2025 earnings.

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Story summary

Q2 2025: lululemon's gross margin fell 110 bps to 58.5% due to markdowns and tariffs amid weak U.S. demand.
EPS $3.10 beat estimates; revenue $2.53B missed amid flat U.S. sales and 3% comps.
Tariffs expected to shave 220 bps from 2025 gross margin; outlook now implies 300 bps decline.
Shares down 54.7% YTD; Zacks expects 11.1% lower fiscal 2025 earnings.