I’ve always been a Lulu girl.
It’s the one brand I’ve never strayed from when it comes to activewear. The Align leggings? I’ve worn them into the ground. The Scuba hoodie? It’s been a go-to for years.
I know the price tags are steep but I’ve always believed you get what you pay for.
So you can imagine my surprise when I walked into my local Lululemon and saw a few pieces I’d consider staples…on sale.
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Not wild prints or odd sizes. I’m talking classic colors, clean designs…things I’m used to seeing full price all year round.
To be fair, it wasn’t like the whole store was marked down. But the items that were stood out to me, because they weren’t what I’d normally expect to be on sale.
It left me wondering if something had changed.
As it turns out, analysts have been seeing similar signs across multiple stores and they’re raising serious concerns about what it means for the brand’s future.
Lululemon’s discount strategy fuels investor concern
Image source: Yuki Iwamura/Bloomberg via Getty Images
Lululemon markdowns raise red flags for analysts
A recent research note from Jefferies stated that Lululemon has been increasing markdown activity at what analysts called “alarming rates,” according to Retail Dive.
Their store visits revealed more promotions than usual — especially in core categories where discounts are typically rare.
Even more concerning was inconsistent pricing on identical items, which could signal a rushed effort to offload inventory.
Jefferies warned that these moves suggest the company is struggling with sell-through and is leaning on markdowns to clear excess product.
This wouldn’t be as alarming if traffic were booming.
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But in the same note, analysts pointed to weak mall traffic in the U.S., fading momentum in China, and overall sluggish sales growth.
They also pointed out that the company’s day-to-day operating costs are rising faster than its revenue — something that could put added pressure on profits and weigh down future earnings.
The analysts also noted a broader shift in merchandise strategy.
While the brand has long been synonymous with yoga-based staples, Lululemon is now leaning into bold colors and logo-heavy designs to appeal to younger shoppers.
It’s a move that could risk alienating some of its loyal base.
Lululemon faces growing pressure from top rivals
Lululemon isn’t just battling internal challenges.
Jefferies pointed out that the brand is also facing growing pressure from direct rivals.
Brands like Vuori and Athleta are gaining traction, and analysts say their stores appear more visually cohesive and thoughtfully merchandised.
Recent data backs that up, showing those competitors are now outperforming Lululemon in both digital traffic and in-store visits since early 2024.
At the same time, Lululemon is leaning heavily into brick-and-mortar expansion.
The company opened 56 new stores last year and plans to add another 40 to 45 in 2025.
But with U.S. traffic trending down and consumer price sensitivity rising, that growth plan carries new risk.
To help offset cost pressures, Lululemon plans to raise prices starting in Q2.
That may not sit well with shoppers, especially as competitors continue to offer strong value.
The brand’s bet on “newness,” including pieces like the “No Line Align” legging, was meant to reignite interest.
But Jefferies remains skeptical.
If traffic doesn’t rebound and markdowns keep growing, Lululemon could be entering a critical new chapter.
My wallet may disagree, but this Lulu girlie is still calling for a comeback.
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