Lululemon (Lulu)) famous for its high-end athletic wear and began to face surprising changes in customer behavior, ending with a memo of concern in 2024, its CEO is warning the cause of the problem.
Lululemon’s fourth quarter revenue report in 2024 revealed that comparable sales in the Americas have remained flat compared to the same period in 2023, despite an increase of 13% year-on-year during the holiday season.
According to Recent data From Placer.ai, Lululemon store traffic for the fourth quarter of 2024 increased by only 2.4% year-on-year. This is weaker than the foot traffic that was faced in the last quarter, which increased by around 8.2%.
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During a revenue call on March 27, Lululemon CEO Calvin McDonald warned that despite recent efforts to attract more customers to the store, the company continues to weaken consumer demand.
“We started with launching some compelling new products this year, but we also believe that the dynamic macro environment has contributed to more cautious consumers,” McDonald said.
He said many of its customers have tightened spending on “economic and political uncertainty” which has contributed to a decline in pedestrians in stores.
“Based on a survey conducted earlier this month in collaboration with IPSOS, consumers are reducing their spending due to growing concerns about inflation and the economy,” McDonald said. “This reveals that traffic across the US industry will be slower in the first quarter, and we’ve experienced this in our business as well.”
Lululemon’s Apparel often sells at premium prices, featuring many items sold for over $100, including hoodies, leggings, and bodysuits. So it’s no surprise that US consumers are cutting high-end activewear from their budgets.
Many consumers across the country are increasingly buying second-hand clothing as they fight against inflation and increased cost of living.
US Used Apparel Market in 2024 I’ve grown The strongest annual growth rate since 2021 is 14%.
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More consumers are more interested in scothing clothing, especially after President Donald Trump enforced a 20% tariff on all goods imported from China and 25% on all goods imported from Mexico and Canada earlier this month.
