Lululemon Athletica Inc (NASDAQ:LULU) shares tumbled as the athletic apparel firm downwardly revised its full-year earnings guidance, citing challenges in its US business.
The company now expects full-year revenue in the range of $10.85 billion to $11 billion, under the prior $11 billion to $11.1 billion range.
It lowered its earnings per share guidance to a range of $12.77 to $12.97, below Wall Street estimates of $14.45 per share.
Tariffs are expected to negatively impact 2025 gross profits by about $240 million due to higher costs and the removal of the de minimis exemption on imports.
Lululemon also reported a revenue miss for the second quarter. Revenue was up 7% at $2.53 billion, missing estimates of $2.54 billion.
Comparable sales were up 1%, with a 4% decline in comparable Americas sales offset by a 15% increase in international comparable sales.
Earnings per share of $3.10 beat estimates of $2.85.
"While we continued to see positive momentum overall in our international regions in the second quarter, we are disappointed with our US business results and aspects of our product execution,” Lululemon CEO Calvin McDonald said in a statement.
“We have closely assessed the drivers of our underperformance and are continuing to take the necessary actions to strengthen our merchandise mix and accelerate our business.”
Meghan Frank, Lululemon’s chief financial officer, also noted industry-wide challenges such as higher tariff rates.
“In light of these dynamics, we are revising our full year outlook. As we begin the back half of the year, our brand and balance sheet remain strong, and we will continue to exercise financial discipline and strategically invest in our growth potential,” Frank said.
Shares of Lululemon traded down 18% at about $168 late morning on Friday.