Lululemon trims earnings outlook amid tariff hit and weak US demand

Lululemon Athletica reported mixed second-quarter results and sharply cut its outlook on Thursday, blaming a weaker U.S. consumer and a sudden rise in tariff costs tied to the removal of the de minimis import exemption. The Vancouver-based apparel maker said revenue for the quarter was about $2.53 billion and earnings per share were $3.10, modestly below year-ago profit, and then lowered both third-quarter and full-year guidance, sending the stock tumbling in heavy trading.

Company executives said comparable-store sales were uneven by region: overall comparable sales showed only modest growth, while the Americas market, Lululemon's profit engine, recorded a decline, and international markets delivered double-digit growth. Management quantified a significant hit from new tariff treatment, saying changes to the de minimis policy — which had allowed many U.S.-bound e-commerce shipments from Canada to enter duty free — would shave hundreds of millions of dollars from gross profit this year. Analysts and company comments put the estimated impact at roughly $240 million and described the policy shift as a material, unexpected headwind to margins.

Following the update, shares plunged...