Raymond James downgrades Lululemon to Market Perform on slowing growth

Raymond James analyst Rick Patel downgraded Lululemon (LULU) to Market Perform from Outperform without a price target following the Q4 report. The company’s Q1 and fiscal 2025 guidance were set below expectations due to lower U.S. traffic Q1-to-date amid an uncertain consumer, the analyst tells investors in a research note. The firm says that despite favorable initial reads from recent product launches, the U.S. remains challenged for Lululemon and is only planned to grow modestly in 2025. Raymond James expected more robust U.S. growth and a return to positive comps in 2025 after last year’s product missteps, but it no longer has high confidence on this outcome. In addition, Lululemon’s gross margin is under pressure on tariffs, the firm adds. It moves to the sidelines looking for more conviction on upside to reset expectations.