McDonalds, MCD, has said that “consumers are spending less due to increased concerns about inflation and the economy"

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.

tastytrade logo+
Get the best broker for options trading and earn Unusual Whales discounted! in cash with an eligible account deposit at tastytrade. Get an Unusual Whales bonus when you deposit $2000. Offer expires 3/31/25. Certain restrictions, terms and conditions apply.
Unusual Whales does not confirm the information's truthfulness or accuracy of the associated references, data, and cannot verify any of the information. Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Options, investing, trading is risky, and losses are more expected than profits. Please do own research before investing. Please only subscribe after reading our full terms and understanding options and the market, and the inherent risks of trading. It is highly recommended not to trade on this, or any, information from Unusual Whales. Markets are risky, and you will likely lose some or all of your capital. Please check our terms for full details.
Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Certain investment planning tools available on Unusual Whales may provide general investment education based on your input. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your legal or tax professional regarding your specific situation. See terms for more information.