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Investors in athletic apparel maker Lululemon Athletica are seeing red this morning after the company reported its second-quarter fiscal 2025 results. While the athleisure brand surpassed Wall Street earnings estimates for the quarter, it provided guidance that alarmed its investors. Heres what you need to know about that guidance and why Lululemon’s stock (Nasdaq: LULU) is crashing. Lululemon Q2 results by the numbers After the closing bell yesterday, Lululemon reported its Q2 results for fiscal 2025, which ended on August 3, 2025. On the surface, the company had some modest wins for the quarter. The highlight was the companys international net revenue, which increased 22%. International comparable sales increased 15%, and gross profit increased 5% to $1.5 billion. The company also posted diluted earnings per share (EPS) of $3.10. As noted by CNBC, these results handily beat LSEG analyst expectations of an EPS of $2.88. Yet its the companys Americas numbers, which include the United States, where cracks have begun to show. Despite strong international net revenue and comparable sales increases, net revenue in the Americas increased by just 1%. And Americas comparable sales decreased 4%. These Americas results offset a substantial number of the significant gains that Lululemon saw internationally for the quarter, and reduced its global net revenue increase to just 7% (to $2.5 billion). Global comparable sales increased just 1%. In total, Lululemon posted revenue for the quarter of $2.53 billion, slightly behind the $2.54 billion analysts expected. But those results arent primarily what have investors spooked. Rather, Lululemon’s guidance for its 2025 full fiscal-year earnings and revenue appears to have shaken investor confidence. Impact of de minimis exemption expiration and Trumps tariffs Along with its Q2 earnings, Lululemon updated its full-year earnings and revenue guidance for fiscal 2025. In terms of 2025 revenue, Lululemon said it expects to take in between $10.85 billion and $11 billion for its fiscal year. That range is below the $11.18 billion that Wall Street analysts were expecting. However, the revenue shortfall doesnt seem to be the main thing driving LULU shares lower this morning. That would be the companys revised full-year earnings outlook for 2025. Now Lululemon says it expects diluted earnings per share to be between $12.77 and $12.97. That is well below what Wall Street analysts were expecting, which CNBC says was an EPS of $14.45 per share. Why did Lululemons guidance fall so sharply? Blame two Trump-fueled policy shifts: tariffs and the end of the de minimis exemption. As Lululemon noted in its earnings release, The guidance for 2025 includes an estimated reduction in gross profit of approximately $240 million, net of currently anticipated mitigation efforts, including vendor savings, and pricing actions, reflecting our current assumptions about higher levels of tariffs on imports into the United States and the removal of the de minimis exemption. American businesses have relied on the de minimis exemption for years. It previously allowed goods valued at less than $800 to enter the country tariff-free. This means a U.S. customer could order up to $800 worth of product and a company like Lululemon could ship it to them directly without paying any import duty, thus keeping down costs. As of last month, this de minimis exemption is now a thing of the past, meaning companies will now pay more to get their goods to U.S. customers. And if companies pass those costs onto customers, customers could cut back on spending. Thats a big factor why Lululemons is forecasting a full fiscal year gross profit reduction of $240 million. LULU stock has had a bad 2025 As of the time of this writing, LULU shares are currently plummeting in premarket trading. The stock price is currently down 19% to $166.94 per share. It hasn’t been that low for over five years. But even before todays premarket crash, LULU shares have had a rough time as of late. Largely thanks to fears over how Trump’s tariffs will impact the companywhich relies on significant imports from Southeast Asian nationsLULU stock has dropped sharply in 2025. As of yesterdays closing price of $206.09, LULU shares have lost more than 46% of their value since the year began.
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E-Commerce
When the Labor Department put out a disappointing jobs report a month ago, an enraged President Donald Trump responded by firing the economist in charge of compiling the numbers and nominating a loyalist to replace her.Nothing quite so dramatic is likely Friday when the department releases hiring and unemployment numbers for August. They are expected to show that companies, government agencies and nonprofits added a modest 80,000 jobs last month, according to a survey of forecasters by the data firm FactSet.That would be a slight improvement on July’s 73,000 but still offer more evidence that the American job market has cooled significantly from last year.The unemployment rate is forecast to stay at a low 4.2% suggesting that employers are stuck in a no-hire, no-fire mode: They are reluctant to add many new workers but don’t want to give up the ones they have. But there are signs they may be starting to cut staff.The U.S. job market has lost momentum this year, partly because of the lingering effects of 11 interest rate hikes by the inflation fighters at the Federal Reserve in 2022 and 2023 and partly because President Donald Trump’s policies, including his trade wars, have created uncertainty that leaves managers reluctant to make hiring decisions.So far in 2025, the economy has generated 85,000 new jobs a month, down from 168,000 last year and an average 400,000 a month during the hiring boom of 2021-2023 as the United States roared back from COVID-19 lockdowns.“The labor market is showing signs of cracking,” said Heather Long, chief economist at Navy Federal Credit Union. “It’s not a red siren alarm yet, but the signs keep growing that businesses are starting to cut workers.”The Labor Department reported Thursday that the number of Americans applying for unemployment benefits a proxy for layoffs rose last week to the highest level since June, though the number of claims remained within a healthy range.The outplacement firm Challenger, Gray & Christmas said Wednesday that U.S.-based employers have announced more than 892,000 jobs cuts this year through August, more than the 761,000 reported for all 12 months of 2024.In a sign that U.S. hiring gains are limited and fragile, nearly 80% of new private sectors jobs this year have been created in just one industry: healthcare and social assistance, a Labor Department category that spans hospitals to daycare centers.After seeing the weak July jobs numbers, Trump fired Erika McEntarfer, head of the Bureau of Labor Statistics, baselessly claiming the hiring report had been rigged to hurt him politically.He has nominated a partisan idealogue, E.J. Antoni, to replace her. But for now, pending Antoni’s confirmation by the Senate, the jobs report is in the hands of the acting BLS commissioner, William Wiatrowski, a career Labor Department official.Economists and others familiar with how the jobs numbers are collected have expressed confidence that Labor Department procedures will keep the data are safe from political interference.What set Trump off a month ago wasn’t the July hiring or unemployment figures. It was BLS revisions, which shaved a stunning 258,000 jobs off May and June payrolls and slashed average monthly hiring from May through July to a mere 35,000.The revisions are standard practice, and necessary because many companies surveyed by the government submit their responses late or correct what they’ve already sent in.Government economists are also contending with a big drop in the share of companies that respond to the surveys. A decade ago, about 60% of companies surveyed responded. Now only about 40% do.And it’s an international problem for data collectors, especially since COVID-19. The United Kingdom even suspended publication of an official unemployment rate because of inadequate responses.“I remember being at an international conference where the chief statistician of the Russian Republic was complaining about how the Russians don’t want to complete their surveys,” William Beach, BLS commissioner from 2019 to 2023, said in an interview last month. “What could he do? If you can’t compel completion in Russia, you can’t compel it anywhere.” Paul Wiseman, AP Economics Writer
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E-Commerce
New data suggests that high-paying remote positions are almost as rare as they were before the pandemic. According to a recent analysis of over one million job postings between January and July from Ladders, a career platform for six-figure salary jobs, those offering salaries of $100,000 or more and that also offer remote or hybrid work plunged 15% in the second quarter of 2025. Only about 6% of high-paying jobs now provide location flexibilitydown from a high of 41% in 2022, and just a couple points above the 4% recorded back in pre-pandemic 2019. By comparison, roughly 20% of jobs advertised on LinkedIn offer hybrid or remote work options. According to Indeed, fully remote positions advertised on its platform jumped from 2.4% of all postings in 2019 to 10.2% in 2022, but have since declined to about 7.9%. Its definitely an employers market, says Ladders founder Marc Cenedella. In 2025, by and large, U.S. and Canadian companies have decided [workers earning six figures or more] are going back to the office. Cenedella adds that while six-figure jobs once represented a small slice of the workforce, the data now applies to a larger proportion of knowledge economy workers, thanks in part to inflation and the growth of the knowledge industry. When we started the business 20 years ago it would have been the top 25% of the workforce, he says. Now probably the top 50% of professional workforces is at that level. The Ladders data suggests that as the labor market tightens, employers are increasingly demanding more in-person work, especially among top earners. Where did all the high-paying flexible jobs go? This trend is an abrupt 180 from even a few years ago. Cenedella explains that employers were amazed in 2021 that they could be just as profitable as they were in the past without having to have all this real estate and overhead. But just a year later, many employers started trying to pull staff back into the office, regardless of how much they make. Today, a more challenging economy and a tighter labor market is giving them the opportunity to enforce their preferred location policies. As time went on, those good habits kind of deteriorated. A new generation hasn’t been taught those good habits, Cenedella says. Cenedella reasons that if organizations could successfully operate remotely, most would opt to do so, as it offers some short-term savings on real estate and overhead. In fact, a recent study conducted by professors at Harvard University, Brown University, and the University of California, Los Angeles, found that workers would accept a significantly lower salaryup to 25% lessin exchange for the opportunity to work remotely or hybrid. But instead of saving on salaries by permitting remote work, the researchers found employers tend to do the opposite: If firms don’t have to pay as much to attract people for remote positions, we might expect the salaries to be lower for remote work rather than in-person workand we don’t find that, says Bobak Pakzad-Hurson, an assistant professor of Economics and Entrepreneurship at Brown University, and one of the studys coauthors. In fact, remote workers make a tiny bit more. Despite workers willingness to sacrifice some of their salary for the opportunity to have more flexibility, the Ladders data suggests employers are unwilling to make that trade. Are high-paying remote jobs ever coming back? Still, Pakzad-Hurson doesnt believe high-paying remote and hybrid work opportunities will remain at such low levels for long. Things in the short-run are tied to political and economic factors, but I dont think the prevalence of work-from-home is going to go away, in part because of technological progress, he says. Much of the hesitation to hire across the board, but especially top earners, is the result of numerous seismic changes hitting the economy and the labor market all at once. Thats causing employers to hold off until they get more clarity on the long-term effects, says career expert Jasmine Escalera of resume writing resource MyPerfectResume. There are way too many factors that are completely changing corporate America, she says, from economics to politics to AI. Amid all these changes Escalera says employers are more hesitant to hireas reflected in recent Bureau of Labor Statistics dataand may feel more emboldened to impose their preference for in-person work on a labor force with more limited options, especially for staff that command a premium salary. With the current labor market conditions, those who are keen on finding a role with both location flexibility and a high salary may need to adjust their expectations, and their timeline. Escalera says the Ladders survey further demonstrates how employers feel theyre in a position to call the shots, and while many are hesitant to cut back on salary, they appear more than willing to cut back on flexibility perks. They feel as though if I give you a higher paying salary, I get to make demands, she says. Companies have way more of an upper hand, and they’re basically dictating how things are going to flow, and workers just have to roll with it. Whatever the reason, employers appear to have settled on a preference for in-person work, and Cenedella of Ladders doesnt believe flexibility will ever return to anything near that 2022 peak. Should it go back to being a hot marketand it will by 2027 or 2028will those numbers go up 1 or 2%? Absolutely, he says. But I cant see a world where we go from 6% remote work to 20%.
Category:
E-Commerce
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