What’s Behind Lululemon’s Stumble — and How It Plans to Recover
Lululemon’s Slowdown — and the Plan to Win Back Momentum
For a retailer that helped define the modern activewear boom, Lululemon is now admitting a tough reality: it hasn’t been catching trends the way it used to.
On a September earnings call, CEO Calvin McDonald said the brand has become “too predictable” in its casual assortment—an acknowledgment that came alongside continued comparable sales declines in North America. He also noted that seasonal colors haven’t performed as expected, a challenge the company had already aimed to fix more than a year earlier, around the same time it admitted it wasn’t consistently stocked in the right sizes.
That combination—predictable assortment, color misses, and execution gaps—raises a bigger question: is this mainly a Lululemon issue, or a premium athleisure slowdown?
A product problem, a category problem, or both?
Some industry observers see this as primarily self-inflicted. Retail Strategy Group principal Liza Amlani argues product cycles can take at least a year from concept to market, meaning brands that get predictable can’t reverse course quickly. In her view, Lululemon leaned too heavily on familiar product franchises, while competitors like Alo and Vuori gained momentum.
Others emphasize the environment. William Blair analyst Sharon Zackfia has said the premium side of the athleticwear market in the U.S. has not been strong recently, but that Lululemon gaining share despite weaker results is still a notable signal.
Emarketer’s Suzy Davidkhanian describes the assortment as feeling more replenishment-driven than fashion-led, which is risky in a category where trend relevance matters. Jessica Ramírez of The Consumer Collective also points to consumers returning to offices more, which can shift apparel spending into other categories.
Activewear is still growing—so the bar is higher. Even with Lululemon’s North American dip, activewear demand remains resilient. Circana data shows U.S. activewear dollar sales are up 3% year-to-date and units are up 7%, while the broader U.S. apparel market is down 4%. Euromonitor data shows global sportswear has grown every year since 2020 and is projected to increase again in 2025 by nearly 5%.
Premium activewear isn’t broken—but the “why pay $100?” question is harder in a high-inflation, price-sensitive environment. Shoppers need newness and differentiation to justify discretionary purchases.
Where Lululemon is holding up—and where it’s slipping
Performance categories are holding up better than social and lounge. Those more casual lines are still a logical brand extension, but they’re more discretionary and tend to require heavier markdowns when trend alignment is off.
Competition is also coming from multiple sides:
Premium challengers like Alo and Vuori are winning attention with trend-forward design.
Lower-priced alternatives and private label raise the pressure on premium brands to deliver constant differentiation.
Lululemon’s lawsuit against Costco over alleged product “dupes” underscores how real the “good enough at a lower price” threat has become.
Trend shifts Lululemon didn’t fully capture
Several trend dynamics have reshaped demand:
Barre and pilates shoppers are moving beyond only skin-tight leggings toward wider-leg, looser silhouettes.
Sports like pickleball, tennis, and golf create demand for different staples (shorts, skirts, dresses), and Lululemon didn’t capitalize as strongly as it could have.
Viral product moments matter more than ever; relying too long on safe core colors can limit breakout wins.
The turnaround strategy: rebuild the product engine
McDonald has said Lululemon is reworking its design and product development process. He highlighted Global Creative Director Jonathan Cheung (who joined last year) and the buildout of a refreshed design team.
A key target: increase “new styles” to 35% of the assortment by next spring, up from 23%.
Lululemon also hired a chief AI and technology officer (who started earlier in the month referenced), with the goal of improving demand prediction and trend responsiveness.
Why “more newness” isn’t automatically the solution
Jefferies analysts have warned that the brand’s “core is cracking,” pointing to heavy markdowns and arguing that chasing louder, youth-oriented styles can lead to a disjointed assortment that doesn’t convert. They also criticized logo-heavy products aimed at younger shoppers, suggesting it may alienate core customers—especially if those items end up on sale racks.
Meanwhile, some loyal customers have complained about discontinued lines, perceived quality declines, and the brand drifting away from performancewear. But sticking too tightly to performance-only products can also limit growth, so the balance is tricky.
Inventory and brand positioning concerns
Jefferies pointed to core black leggings showing up in outlets as a sign of deeper inventory and positioning issues. Sharon Zackfia has noted that investors are still trying to disentangle what’s driving weakness—competition, shifting tastes, or product stagnation—and that the speed of iteration after new product launches will be a major factor in whether the turnaround works.
Pressure on growth pillars: men’s and international
Men’s is a key growth pillar, yet Jefferies noted a high volume of men’s basics (bottoms and polos) on sale during the summer. Lululemon is still targeting aggressive expansion by 2026: men’s doubling and international quadrupling.
International results remained strong, but HSBC analysts flagged cautious commentary on markets like Canada and China and warned the brand may be becoming globally vulnerable. HSBC downgraded Lululemon, calling it “in a downward spiral,” citing competitive pressure, delayed acknowledgment of product issues, and weakening foot and web traffic.
The real question
The plan is clear: innovate faster, refresh design, forecast demand better, and restore differentiation. The harder part is execution—delivering newness that feels cohesive (not chaotic), protecting premium brand equity, and regaining trend leadership in a category where consumers have more options than ever.