Lululemon (NASDAQ:LULU) shares slipped today after Barclays downgraded the athleisure giant from Buy to Hold and lowered the price target from $546 to $395 per share. This was due to tougher competition and a change in shopping trends, as teens and young women seem to be swapping yoga pants for dressier outfits. Analyst Adrienne Yih points out that these shoppers might cut back on buying more athleisure gear since they already have plenty in their closets.
If this consumer shift continues into the second half of 2024, it could mean that Lululemon’s slowdown needs more than a quick fix and might be a longer-term issue, especially as competitors step up their game. In addition, with the economy remaining unpredictable, Yih is worried about Lululemon’s ability to maintain its high earnings. As a result, she has decided to wait and see if Lululemon can bounce back in the spring and summer.
It’s worth noting that, so far,…
