Raymond James downgraded Lululemon (NASDAQ:LULU) from a “Buy” to a “Market Perform” rating due to slowing growth.
Lululemon’s shares dropped nearly 13% in premarket trading following a pessimistic annual forecast.
The company announced its fiscal 2025 sales forecast to be between $11.15 billion and $11.3 billion, aligning with the higher end of analyst expectations but amidst declining consumer confidence.
On March 28, 2025, Raymond James downgraded Lululemon (NASDAQ:LULU) from a “Buy” to a “Market Perform” rating, expressing concerns over the company’s slowing growth. At the time, Lululemon’s stock price was $341.53. Lululemon Athletica is a well-known athletic apparel company, competing with brands like Nike and Under Armour. It is recognized for its high-quality yoga and fitness wear.
Following the downgrade, Lululemon’s shares experienced a significant decline, dropping nearly 13% in premarket trading. This downturn was triggered by the company’s release of a pessimistic annual forecast, reflecting challenges in the broader apparel industry. The inconsistent consumer demand environment and uncertainty surrounding tariffs have compounded difficulties for the sportswear maker.
Lululemon announced its sales forecast for fiscal 2025, projecting revenues between $11.15 billion and $11.3 billion. This outlook aligns with the higher end of analyst expectations. However, the forecast comes amid declining consumer confidence, which may impact performance. Despite strong fourth-quarter earnings and revenue surpassing Wall Street expectations, the company’s guidance for 2025 fell short of analyst predictions.
During an earnings call, CEO Calvin McDonald highlighted that a recent survey indicated consumers are spending less due to economic and inflation concerns. This has resulted in reduced traffic for Lululemon and its industry peers. Despite these challenges, McDonald noted positive customer responses to the company’s innovations and emphasized focusing on controllable elements amid ongoing macroeconomic and geopolitical uncertainties.
Lululemon’s current stock price is $341.53, reflecting an increase of 1.11% or $3.74. Today, the stock has traded between a low of $334.07 and a high of $348.50. Over the past year, LULU has reached a high of $423.32 and a low of $226.01. The company’s market capitalization stands at approximately $39.85 billion, with a trading volume of 3,376,189 shares on the NASDAQ exchange.
