Lululemon stock plunges after weak 2025 outlook despite earnings beat

Lululemon stock tumbled after issuing a weak 2025 outlook, with tariffs and sales pressure hitting guidance.

Lululemon shares fell sharply in after-hours trading on Thursday after the athletic apparel company issued a weaker-than-expected full-year outlook despite topping second-quarter earnings estimates.

The retailer reported second-quarter earnings of $3.10 per share, above analyst forecasts of $2.88 per share, according to LSEG. Revenue came in at $2.53 billion, slightly below Wall Street expectations of $2.54 billion. Net income declined to $370.9 million compared with $392.9 million a year earlier.

However, Lululemon warned that tariffs and the removal of the de minimis trade provision would reduce full-year profits by roughly $240 million. The company now expects fiscal 2025 earnings of $12.77 to $12.97 per share, well below analyst expectations of $14.45. Revenue is projected between $10.85 billion and $11 billion, compared to Wall Street’s forecast of $11.18 billion.

Shares dropped more than 10% after the guidance was released, extending a year-to-date decline of over 45%.

CEO Calvin McDonald told analysts that the company had become “too predictable” with its casual and lounge categories, noting that product cycles had been allowed to run too long. “Our lounge and social product offerings have become stale and have not been resonating with guests,” he said.

For the third quarter, Lululemon expects revenue of $2.47 billion to $2.50 billion, below Wall Street’s estimate of $2.57 billion. Earnings per share are projected in the range of $2.18 to $2.23, compared to analyst expectations of $2.93.

Lululemon added 14 new stores in the quarter, bringing its total to 784 worldwide, while comparable sales rose just 1%, short of the 2.2% analysts expected.