Lululemon (LULU) shares dropped 15% in afternoon trading after CEO Calvin McDonald warned that consumers are beginning to spend less due to growing concerns about the U.S. economy.

“The dynamic macro environment has contributed to a more cautious consumer,” McDonald told investors during a Thursday evening earnings call. “Consumers are spending less due to increased concerns about inflation and the economy,” he said, noting that the shift has led to slower foot traffic both for Lululemon and across the broader retail sector.

As of 11:27 AM EDT Friday, Lululemon stock was trading at $251.85, down 1.86% on the day. The stock opened at $258.90 and hit a low of $257.59.

McDonald’s comments were echoed by new consumer sentiment data released Friday. The University of Michigan’s consumer sentiment index fell to its lowest level since November 2022, mirroring a drop seen in another key confidence gauge earlier in the week.

Retailers across the industry have recently signaled signs of consumer hesitation, as households weigh the impact of shifting economic conditions and rising tariffs on their budgets.

“We’ve seen a lot of struggles across the sector, [with] companies’ outlooks coming in conservative,” said Aneesha Sherman, senior analyst at Bernstein, in an interview with Yahoo Finance. “Declining consumer sentiment and a lot of uncertainty around macro … all of that is taking a toll on guidance.”

For fiscal year 2025, Lululemon expects net revenue to range between $11.1 billion and $11.3 billion. The company projects adjusted earnings per share to fall between $14.95 and $15.15.