Lululemon (LULU, Financial) experienced a significant 15% drop in its stock price, marking the steepest decline since March 2020. Analysts attribute this plunge to two main factors causing market anxiety.
Firstly, the proposed high tariffs on Vietnamese imports by former President Trump have raised concerns. With 68% of Lululemon's production based in Vietnam, the tariffs could increase the company's per-item cost by $22 to $35.
Secondly, there is a warning of a consumer spending downgrade. Lululemon's North American same-store sales growth dramatically slowed to 4%, compared to 17% in the same period last year. Additionally, data from JPMorgan indicates a 9% drop in repeat purchases among its high-end customers.
