The S&P 500’s Worst Performing Stock Is Also The Company That Sells The Most Expensive Leggings – The Average Joe

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    The S&P 500’s Worst Performing Stock Is Also The Company That Sells The Most Expensive Leggings

    Noah Weidner

    May 24, 2024

    Is Americans’ passion for trendy workout gear stronger than its financial sense? Lululemon ($LULU) is facing this question head-on as it grapples with the fate of its pricey $98 leggings and $68 shorts.

    In its latest quarterly report, Lululemon saw only a 9% increase in US revenue compared to last year. This marks a sharp decline from the 29% growth it experienced during the same period in 2023.

    • Investors are growing concerned as the company predicts a further slowdown in North American growth, scaring investors who helped the company afford a premium market valuation.
    • $LULU stock has plunged 40% this year, earning it the unfortunate title of the worst-performing stock in the S&P 500 — surpassing even Boeing ($BA) and Tesla ($TSLA).

    Exporting expensive comfort: Lululemon’s acquisition of connected fitness company Mirror was initially seen as a strategy to expand into the exercise equipment market. However, following this setback, Lululemon has found a bright spot — international markets, where sales surged by 54% year-over-year (YoY). In response, the company is reorganizing its product and marketing teams to target regional and global audiences, hoping to attract customers with its premium activewear abroad… even if low-cost competitors like Shein, Athleta, and Fabletics are closing in, and in some cases, at a tenth of the price.

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