Your next purchase from Lululemon Athletica Inc. might cost you more.
The Vancouver-based apparel company revealed Thursday that it hopes to weather new and possibly incoming tariffs by passing along some of the costs to customers.
“We are planning to take strategic price increases, looking item by item across our assortment as we typically do,” chief financial officer Meghan Frank told analysts on a call held as the company’s share price tumbled 23 per cent to US$255.32 in afterhours trading.
The price increases on products will be “modest in nature” and only applied to a “small” portion of Lululemon’s products but reflect the lengths the business is having to go to to steel itself from U.S. President Donald Trump’s trade war and the weight its placing on wallets.
Lululemon is caught up in the swirling economic slowdown because one of Trump’s targets has been its home nation, Canada. He’s also taken aim at China — another key market for the business — and several Middle Eastern and Asian countries that are meccas for clothing manufacturers.
While Lululemon’s customers are used to paying a premium for its workout wear, the company’s CEO Calvin McDonald hinted they’re not immune to Trump’s whims.
“The current tariff paradigm has brought uncertainty into the retail environment, as consumers try to assess the impact they will have on daily life,” he said on the same call as Frank.
He insisted Lululemon is “better positioned than most” to navigate whatever is headed its way, but conceded the business is already seeing lower traffic, particularly in the U.S.
The company expects tariffs to have an even “more pronounced” impact in the coming months, causing it to slash its annual diluted earnings per share forecasts Thursday.
At the same time as it made the cuts, it revealed its first-quarter net income totalled US$314.6 million, down from US$321.4 million in the same period a year earlier.
The numbers reflect the “more cautious, discerning consumer” as well as a shift in the timing of the Lunar New Year, which impacted its overall revenue growth, Lululemon executives said.
Profits at the company, which keeps its books in U.S. dollars, amounted to US$2.60 per diluted share, up from US$2.54 per diluted share a year prior.
Net revenue for the period ended May 4 was about US$2.37 billion compared with US$2.21 billion a year earlier.
Lululemon’s comparable sales increased one per cent overall but fell by two per cent across the Americas.
“We’re definitely not happy where the growth is in the U.S.,” McDonald said.
However, he said he was “pleased” that the company has been seeing some rebound from a lack of newness that disappointed consumers last year and earlier this year.
Newness — how fresh a brand’s products and styles appear to consumers — is one of the key ways retailers draw in customers.
McDonald said after its dip in prior quarters, newness is back to historical levels.
This report by The Canadian Press was first published June 5, 2025.
