• by Sarah Mahoney  @mahoney_sarah, March 28, 2025

Lululemon’s streak of outperforming the retail sector is showing signs of strain, with the company issuing a softer-than-expected forecast despite a strong holiday quarter. But its sights are set on a different prize: brand awareness.

Revenues rose 13% to $3.6 billion in the fiscal fourth quarter, up from $3.2 billion a year ago, with net income climbing 12% to $748.4 million. U.S. sales stabilized, rising 7%, thanks in part to refreshed assortments. But the company says economic headwinds are making consumers more cautious—and that’s hitting store traffic.

“We are seeing slower traffic across the industry in the U.S., which we are experiencing in our business as well,” said CEO Calvin McDonald on the company’s investor webcast. “People are spending less due to increased concerns about inflation and the economy.”

Those comments — and the company’s new guidance of 5% to 7% revenue growth for the year, well below analyst expectations of 9% — sent Lululemon shares down as much as 10% in early trading.

Still, analysts remain bullish on the brand. “Although we may lower our near-term forecast, Lululemon’s brand strength holds,” wrote Morningstar analyst David Swartz, citing strong customer loyalty and upcoming product launches. Oppenheimer’s Brian Nagel called out “much-improved merchandising” as a reason to expect domestic demand to gradually recover, even in a rocky macro environment.

Much of McDonald’s remarks centered not on consumer softness but on Lululemon’s next act: ramping up global brand awareness. Unaided awareness remains in the single digits in markets like France, Germany, and Japan, and only in the 30s in the U.S. -- leaving considerable room for improvement.

In response, the brand is investing in localized experiences and high-profile marketing. In the U.S., it kicked off 2025 with a splashy presence at the Rock 'N' Roll Half Marathon in Las Vegas, including a Sphere takeover and pre-race yoga events. In New York, it launched the new Glow Up franchise with a two-week pop-up in Soho, featuring classes led by fitness influencers and ambassadors.

Lululemon is also expanding its ambassador roster, adding high-profile athletes like PGA golfer Max Homa, tennis pro Frances Tiafoe, and F1 driver Lewis Hamilton to help drive relevance across markets. The company showed off those connections with event tie-ins at the Phoenix Open, Indian Wells, and Formula One races in Melbourne and Shanghai.

On the campaign side, Lululemon recently launched its new global platform, “Live Like You’re Alive,” anchored by 78-year-old fitness influencer Joan McDonald. Upcoming chapters will spotlight the 10th anniversary of the Align pant and a run-focused campaign later in the year.

While awareness-building is a global goal, the U.S. remains central. “Our opportunity to grow awareness remains significant,” McDonald noted, emphasizing the role of activations and memberships in connecting with Lululemon’s 28 million-member community.

Even with tempered expectations, the company plans to expand physical retail by 10% in 2025. New stores -- including flagships in London, Italy, and across Europe -- are being positioned as immersive brand destinations, combining product with experience.