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Investing.com -- Lululemon Athletica was downgraded by Wall Street brokerages after its earnings results and outlook of slowing U.S. sales, softer growth in Canada and China, and a steeper-than-expected hit from U.S. tariffs.
William Blair lowered the stock to Market Perform, citing uncertainty over the timing of a U.S. turnaround, the loss of tariff exemptions, and emerging macro weakness in China.
The broker said it now expects the company to “lose a year of earnings”
Evercore ISI also downgraded Lululemon to In Line from Outperform, slashing its price target to $180.
It said U.S. sales trends worsened through the summer, Canada growth slowed, China guidance was trimmed, and tariff costs tied to the end of the “de minimis” import rule were far larger than expected. The broker warned margins are at risk of further compression in 2025 and 2026.
Oppenheimer moved the stock to Perform from Outperform and withdrew its $500 target, noting merchandising shortfalls are still hurting conversion rates.
TAG likewise cut its rating to Market Perform and reduced its price target to $200 from $360, flagging disappointing U.S. sales in core categories, a reduced full-year revenue and earnings outlook, and greater-than-anticipated tariff pressure.
Lululemon’s second-quarter report showed flat U.S. sales, slower growth in Canada, trimmed China expectations, and a lowered full-year outlook.
The company’s push to revive demand with new product sets is unlikely to have an impact until 2026, leaving few near-term catalysts for the stock.