2024-08-29 20:25:27
Lululemon Athletica has cut its annual sales forecast as the company faces declining demand for its high-end activewear in North America. With tougher competition and more cautious consumer spending behavior, Lululemon’s revised forecast expects net income between $10.38 billion and $10.48 billion for fiscal 2024, down from the projected range of US$10.70 billion to US$10.80 billion.
The brand, known for its premium leggings and tank tops, saw its share price drop nearly 7% in aftermarket trading today. This fall adds to the significant losses that the company’s shares have suffered this year, amounting to a decline of almost 50%.
The slower sales in early 2024 represent a change from Lululemon’s strong growth in previous years. Inflation and discretionary consumer spending patterns are partly responsible for the brand’s current challenges.
Lululemon also struggled with its “Breezethrough” leggings, which were pulled from stores and its website shortly after launching in July due to customer complaints about the product’s fit, material and seams.
Despite these obstacles, Placer.ai’s foot traffic analysis shows that visits to Lululemon stores increased by 3.7% from May to July, although the lowest growth occurred in July within that period.
Reuters contributed to this story.
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