Lululemon Athletica Inc., the Vancouver-based apparel giant, is undergoing significant organizational changes, resulting in the elimination of approximately 150 corporate jobs. These positions are primarily within the company's store support centres, signaling a strategic shift in operations.
The Impact of Global Tariffs
The restructuring comes at a time when global tariff wars, initiated by U.S. President Donald Trump, are disrupting supply chains and affecting profitability across the retail sector. Lululemon, which relies heavily on manufacturing in China and other Asian countries, is feeling the pinch. The company has announced strategic price increases on select products to mitigate some of these costs, though it aims to keep the hikes modest to avoid alienating customers.
Financial Forecast Adjustments
In light of these challenges, Lululemon has revised its full-year profit expectations downward. The company now anticipates diluted earnings per share to be between US$14.58 and US$14.78, a decrease from the previously projected range of US$14.95 to US$15.15. This adjustment reflects the anticipated impact of tariffs and a noted decline in U.S. store traffic.
Market Reaction
Since announcing its first-quarter earnings, Lululemon's shares have plummeted nearly 29%, underscoring investor concerns over the company's short-term profitability and the broader implications of ongoing trade tensions.
Lululemon is cutting about 150 corporate jobs as part of changes to its organizational structure. Brandon Bell/Getty Images
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