Shares of Lululemon Athletica (NASDAQ: LULU) plummeted after a disappointing quarterly update, citing tariff costs and soft U.S. demand. Revenue rose 7% to $2.53 billion, but comparable sales in the Americas fell 3%. Management lowered full-year revenue and EPS outlook due to these challenges.

The U.S. slowdown is concerning as it impacts Lululemon’s profit engine. International growth remains strong, but the company’s revised guidance reflects pressure from tariffs and demand softness. Investors should watch for signs of stabilization in U.S. traffic and pricing discipline to gauge recovery potential.

Despite the recent stock drop, Lululemon’s valuation is reasonable. Management’s forecast of 2025 earnings per share puts the stock at just 13 times that figure. Patient investors may find value if the company can address U.S. challenges and manage tariffs effectively. Monitoring key markers like demand, margins, and inventory quality is crucial for assessing future performance.

Read more at Yahoo Finance: Lululemon Stock Has Been Absolutely Demolished. Time to Buy?