Lululemon shares plunge as tariffs chunk | EUROtoday

Lululemon shares plunge as tariffs chunk
 | EUROtoday

Lululemon shares have plunged by greater than 20% after it reduce its annual revenue forecast, as the corporate navigates tariffs and fears in regards to the US financial system slowing.

“We experienced lower store traffic in the Americas, partially reflective of economic uncertainty, inflationary pressures, lower consumer confidence, and changes in discretionary spending,” Lululemon mentioned in a press release.

The athleisure model joins a rising listing of huge corporations to warn in regards to the impression of US President Donald Trump’s commerce insurance policies.

The Trump administration’s strategy to tariffs has triggered considerations over rising costs and a weakening financial system.

“We are planning to take strategic price increases… on a small portion of our assortment, and they will be modest in nature,” Lululemon’s finance chief Meghan Frank mentioned.

The firm additionally mentioned it is going to reduce prices and negotiate with its distributors.

Last 12 months, 40% of its merchandise have been made in Vietnam, and 28% of its materials got here from mainland China.

Clothing and footwear manufacturers are among the many companies hit hardest by tariffs as they make items in Asian international locations, which have confronted steep levies from the US.

In April, sportswear large Adidas warned that import taxes imposed by Trump will result in greater costs within the US for well-liked trainers together with the Gazelle and Samba.

“Since we currently cannot produce almost any of our products in the US, these higher tariffs will eventually cause higher costs for all our products for the US market,” chief government Bjorn Gulden mentioned.

Also in April, footwear maker Skechers withdrew its annual outcomes forecast, citing financial uncertainty.

“The current environment is simply too dynamic from which to plan results with a reasonable assurance of success,” Skechers’ chief working officer, David Weinberg, instructed buyers in a post-earnings name.

Last month, Nike mentioned it will increase costs on some trainers and clothes within the US from early June.

The sportswear large didn’t identify US tariffs explicitly as a cause for the rise, saying it recurrently made “price adjustments”.

https://www.bbc.com/news/articles/c8re86n23j5o