The worth of Lululemon’s fashionable leggings and yoga put on might quickly leap by greater than 10% due to President Donald Trump’s sweeping reciprocal tariffs, in accordance with business specialists.
The high-end athleisure model is “in the tariffs bullseye” – with the majority of its manufacturing sourced from nations that had been among the many hardest hit laborious, William Blair analyst Sharon Zackfia wrote in a notice to shoppers.
Lululemon has mentioned 40% of its merchandise are made in Vietnam – which the US plans to hit with a 46% tariff.
One other 46% of Lululemon’s clothes are produced in Cambodia, Sri Lanka, Indonesia and Bangladesh, which face tariffs between 32% and 49%.
If the levies go into impact as deliberate on Wednesday, the model’s devoted buyers might anticipate to pay 11% to 12% extra if the retailer decides to move alongside extra prices from the brand new taxes, Zackfia mentioned.
Which means Lululemon’s trademark $118 legging might spike to as excessive as $132,
Greater than 60% of Lululemon gross sales got here from the US in 2024 – and now the agency is going through a blended tariff fee of 39%, Zackfia mentioned within the notice.
However Zackfia mentioned she expects any worth will increase from Lululemon “will likely be more surgical than an across-the-board hike.”
Lululemon didn’t reply to The Put up’s request for remark.
Throughout its most up-to-date earnings name, the retailer’s chief monetary officer, Meghan Frank, mentioned Lululemon can be “keeping a close eye” on the opportunity of broader tariffs.
The corporate final hiked costs by 10% in 2022.
When the retailer confronted added prices throughout a provide chain disaster in 2021 and 2022, it “took a more cautious approach” to elevating costs than business rivals, the analyst famous.
Lululemon shares rose 2.8% by Friday afternoon, after Trump mentioned he had a “very productive call” with Vietnam, signaling the tariffs may very well be negotiated decrease quickly.
Together with Lululemon, a number of different manufacturers together with Nike, Apple Coach and Abercrombie & Fitch might quickly spike costs due to their provide chains are tied to Asia.
