 |
|
|
|||||
Popular athletic apparel brand Lululemon Athletica is seeing its share price crash today. As of this writing, the stock (Nasdaq: LULU) is down nearly 20% in early-morning trading. The companys dramatic share price fall comes a day after it announced its first-quarter results for fiscal 2025, and issued a tariff-related warning about its profit forecasts. Heres what you need to know. Lululemon reports Q1 2025 results Despite todays stock price fall, Lululemon actually reported fairly positive results for its first quarter of fiscal 2025, which ended on May 4. Announcing its results yesterday after the closing bell, Lululemon reported $2.37 billion in net revenue, an increase of 7% compared to the same quarter a year earlier. The company also announced a comparable sales increase of 1%. However, diving into that comparable sales increase of 1% reveals some potentially downbeat foreshadowing. That comparable sales increase of 1% is taking Lululemons full global sales into account. Internationally, Lululemons comparable sales increased 6%. But when you look at the comparable sales only in America, they actually decreased by 2%. That American slice of the comparable sales pie suggests that the company is facing greater struggles in the U.S. than the rest of the world. Lululemon also announced a gross profit for the quarter of $1.4 billion, up 8% from the same quarter a year earlier. The companys diluted earnings per share (EPS) were $2.60, versus $2.54 for the same quarter a year earlier. The good news for Lululemon is that its revenue of $2.37 billion and EPS of $2.60 beat Wall Street expectations. According to a consensus estimate cited by CNBC, analysts were expecting revenue of $2.36 billion and an EPS of $2.58. Yet despite these beats, Lululemon also reported something that sent shivers down the spines of investors: a Q2 forecast that did not meet expectations. Lululemon issues disappointing guidance forecast Lululemon said it expects its current Q2 net revenue to be in the range of $2.54 billion to $2.56 billion. That forecast was below what analysts were expecting. As Yahoo Finance notes, analysts had expected a Q2 net revenue forecast of $2.57 billion. But worryingly, the company said its guidance does not incorporate future unknown impacts, including tariffs and macroeconomic trends. Its that unknowable impact of tariffs on Lululemons sales that likely worries investors the most. Its Q1 results already showed that the companys sales in America are not as strong as in other markets, which is likely driven by in part weakening consumer confidence and fears of further tariff-fueled price increases ahead. If consumer confidence weakens further, Lululemon, like other retailers, could be hit harder as Americans cut back on nondiscretionary spending to mitigate the impact on their wallets. However, Lululemon faces bigger challenges than just weakening consumer confidence in the United States. The Canadian company manufactures the majority of its goods in Asia. As Yahoo Finance notes, as of 2023, 42% of Lululemons products were made in Vietnam, 16% in Cambodia, 11% in Sri Lanka, 10% in Indonesia, and 8% in Bangladesh. Additionally, it sourced 40% of its components for those products from Taiwan, 26% from China, and 12% from Sri Lanka. Many of those countries have had huge tariffs placed upon goods from them by President Trump. If all those tariffs go into effect, it could necessitate price hikes for many of Lululemons products in Americasomething not all its U.S. customers may be willing to absorb. That could ultimately lead to a decline in sales. In fact, Lululemon has already said that it will raise prices on some of its goods. We are planning to take strategic price increases, looking item by item across our assortment as we typically do, and it will be price increases on a small portion of our assortment, Lululemon CFO Meghan Frank said on the companys financial call. One positive forward-looking sign, however, was that Lululemon reiterated its previously forecasted outlook for all of 2025. The company said it still expects net revenue of between $11.15 billion and $11.30 billion. LULU shares tank Still, Lululemons disappointing Q2 forecast and its manufacturing vulnerability to Trump’s tariffs have sent the company’s shares plunging this morning. As of the time of this writing, LULU shares are down almost 20% to just above $265. Since the start of the year, Lululemons stock price has declined 30%.
Category:
E-Commerce
A federal judge late Thursday temporarily blocked a proclamation by President Donald Trump that banned foreign students from entering the U.S. to attend Harvard University.Trump’s proclamation, issued Wednesday, was the latest attempt by his administration to prevent the nation’s oldest and wealthiest college from enrolling a quarter of its students, who accounts for much of Harvard’s research and scholarship.Harvard filed a legal challenge the next day, asking for a judge to block Trump’s order and calling it illegal retaliation for Harvard’s rejection of White House demands. Harvard said the president was attempting an end-run around a previous court order.A few hours later, U.S. District Judge Allison Burroughs in Boston issued a temporary restraining order against Trump’s Wednesday proclamation. Harvard, she said, had demonstrated it would sustain “immediate and irreparable injury” before she would have an opportunity to hear from the parties in the lawsuit.Burroughs also extended the temporary hold she placed on the administration’s previous attempt to end Harvard’s enrollment of international students. Last month, the Department of Homeland Security revoked Harvard’s certification to host foreign students and issue paperwork to them for their visas, only to have Burroughs block the action temporarily. Trump’s order this week invoked a different legal authority.If Trump’s measure were to survive this court challenge, it would block thousands of students who are scheduled to come to Harvard’s campus in Cambridge, Massachusetts, for the summer and fall terms.“Harvard’s more than 7,000 F-1 and J-1 visa holdersand their dependentshave become pawns in the government’s escalating campaign of retaliation,” Harvard wrote Thursday in a court filing.While the court case proceeds, Harvard is making contingency plans so students and visiting scholars can continue their work at the university, President Alan Garber said in a message to the campus and alumni.“Each of us is part of a truly global university community,” Garber said Thursday. “We know that the benefits of bringing talented people together from around the world are unique and irreplaceable.”Harvard has attracted a growing number of the brightest minds from around the world, with international enrollment growing from 11% of the student body three decades ago to 26% today.As those students wait to find out if they’ll be able to attend the university, some are pursuing other options.Rising international enrollment has made Harvard and other elite colleges uniquely vulnerable to Trump’s crackdown on foreign students. Republicans have been seeking to force overhauls of the nation’s top colleges, which they see as hotbeds of “woke” and antisemitic viewpoints.Garber says the university has made changes to combat antisemitism. But Harvard, he said, will not stray from its “core, legally-protected principles,” even after receiving federal ultimatums.Trump’s administration has also taken steps to withhold federal funding from Harvard and other elite colleges that have rejected White House demands related to campus protests, admissions, hiring and more. Harvard’s $53 billion endowment allows it to weather the loss of funding for a time, although Garber has warned of “difficult decisions and sacrifices” to come.But cutting off students and visiting scholars could hamstring the university’s research and global standing. The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org. Chrissie Thompson and Collin Binkley, AP Education Writers
Category:
E-Commerce
Craft retail chain The Michaels Companies said on Thursday that it has acquired the beloved fabrics retailer Joann, which recently winded down operations and closed all of its stores after a second bankruptcy. The sale included Joanns intellectual property, as well as its private label brands, like Big Twist yarn. The announcement noted that searches for “fabric” on Michaels.com have skyrocketed by 77% since Joann stores began closing their doors in early 2025. As a result, Michaels has already been adjusting its merchandise accordingly to set the stage for absorbing Joann customers. The chain said it has increased merchandise in the fabric category in over 680 stores. ‘Rising demand across categories’ Post-acquisition, Michaels said it will expand on the kinds of merchandise once available at Joanns, such as fabric, yarn, sewing machines, and other sewing materials even further. The craft store will add more than 600 products once available at Joann’s to its inventory, including increasing its yarn merchandise by 25%. “This acquisition allows us to better serve both new and existing customers, respond to rising demand across categories, and build on our momentum as the destination for creating and celebrating in North America,” CEO David Boone said in a statement. Texas-based Michaels has been privately held since a 2021 deal with private equity firm Apollo Global Management, valued at $3.3 billion at the time. The brand has long competed with Joann in many merchandise categories and services such as custom framing. In January 2025, Joann filed for Chapter 11 bankruptcy protection, which was its second in less than one year. Initially, Joann said it would keep stores open during the proceedings. Weeks later, it announced that 500 of its 800 stores would close. The chain closed its last remaining stores in recent weeks. Will Michaels take over former Joann locations? Per Joann bankruptcy filings, Michaels has already taken over at least three leases for what appear to be former Joann stores, but its plans for those leases are unclear. Fast Company reached out to Michaels to confirm whether the chain would be taking over those locations or had plans to acquire additional leases. We will update this post if we hear back.
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||