Lululemon challenges ‘clearly mounting,’ says Jefferies

Jefferies visited the Roosevelt Field Mall, Walt Whitman Shops, & Woodbury Common Outlets ahead of the July 4th long weekend and observed softer traffic. Lululemon (LULU) challenges are clearly mounting, the firm says, with markdowns spreading, soft traffic, rising competition, and inventory outpacing sales. Expanding stores and outlets is not helping and exacerbates rent deleverage and brand erosion, Jefferies adds. The firm continues to believe U.S. sales and EPS declines in 2025 and reiterates an Underperform on the shares with a price target of $175.