Supreme Court Delays Decision on Trump's Tariffs, Potentially Impacting $260B Revenue
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 14 2026
0mins
Should l Buy LULU?
Source: seekingalpha
- Market Reaction: The Supreme Court's delay in ruling on Trump's tariffs has led to a broad sell-off in stocks like RH, Nike, and Lululemon, indicating market sensitivity to tariff policy uncertainty.
- Tariff Impact: The potential reversal of Trump's 'Liberation Day' tariffs could lower the statutory import tariff from 16.1% to 10.4%, significantly easing cost pressures on U.S. companies reliant on overseas manufacturing.
- Revenue Refund: If the ruling reverses the tariffs, the administration would be required to return approximately $260 billion in tariff revenue, which could have substantial implications for the federal budget and future fiscal policy.
- Current Import Rates: Presently, imports from India are taxed at 50%, 15% from the EU, and 10% from China, while Canada faces a 35% tariff, highlighting the ongoing pressures the U.S. faces in international trade.
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Analyst Views on LULU
Wall Street analysts forecast LULU stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LULU is 207.12 USD with a low forecast of 146.00 USD and a high forecast of 303.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
22 Analyst Rating
1 Buy
21 Hold
0 Sell
Hold
Current: 170.090
Low
146.00
Averages
207.12
High
303.00
Current: 170.090
Low
146.00
Averages
207.12
High
303.00
About LULU
lululemon athletica inc. is a technical athletic apparel, footwear, and accessories company. The Company organizes its operations into four regional markets: the Americas, China Mainland, Asia Pacific (APAC), and Europe and the Middle East (EMEA). It conducts its business through a number of different channels in each market, including the Company-operated stores, e-commerce, temporary locations, wholesale, outlets, a re-commerce program, and license and supply arrangements. The Company offers a comprehensive line of technical athletic apparel, footwear, and accessories marketed under the lululemon brand. Its apparel assortment includes items such as shorts, tops, and jackets designed for a healthy lifestyle, including athletic activities such as yoga, running, training, and most other activities. It also offers apparel designed for being on the move and fitness-inspired accessories. It operates stores in the United States, Canada, China Mainland, Australia, South Korea and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Michael Burry Sees Acquisition Potential in Lululemon
- Investor Interest: Renowned investor Michael Burry labeled Lululemon (LULU) as a “tempting” acquisition candidate, indicating a growing interest in the company for private equity buyouts, which may attract more investor attention.
- Increased Holdings: Burry initiated a 50,000 share position in Lululemon through Scion Management in Q2 2025 and doubled it to 100,000 shares in Q3, raising its portfolio weight to approximately 2%, reflecting his confidence in the company.
- Strong Financials: At the end of Q3, Lululemon held $1 billion in cash and cash equivalents, with the capacity to borrow an additional $593 million under its revolving credit facility, indicating robust financial health and the ability to navigate market fluctuations.
- Stock Price Volatility: Despite a 42% decline in Lululemon's stock price over recent months, shares rose 3% on Monday, suggesting a potential reassessment of the company's future prospects, which may present buying opportunities for investors.
See More
Nike and Lululemon Struggle Amid Consumer Spending Challenges
- Stock Performance Comparison: Nike's stock has dropped about 63% from its previous highs, with a 13% decline over the past 12 months, while Lululemon has seen a 50% drop, indicating Nike's relative resilience amid market volatility.
- Revenue Pressure Analysis: Both companies face revenue pressures from tariffs and soft demand, with Nike reporting a 16% year-over-year sales decline in Greater China, while Lululemon achieved a 7% revenue increase in the last quarter, showcasing its stronger recovery potential.
- Inventory Management Advantage: Lululemon successfully sold excess inventory during the holiday season, positioning itself with leaner inventory ahead of the spring product refresh, which could help tighten margins by avoiding promotional sales pressure.
- Valuation Comparison: Lululemon's forward price-to-earnings ratio is around 15, significantly lower than Nike's 42, indicating that Lululemon shares are perceived as better value in the current market environment.
See More
Nike Stock Continues Decline, Market Outlook Worrisome
- Performance Decline: Nike's revenue increased only 1% year-over-year in Q2 of fiscal 2026, while direct-to-consumer sales fell 8%, indicating weakness in its core business that could impact future profitability.
- China Market Challenges: Revenue in Greater China dropped 17% year-over-year, significantly worse than the 9% decline in Q1, suggesting that Nike is losing market share to competitors like Lululemon, which is experiencing strong growth in the region.
- Margin Pressure: Although wholesale revenue rose 8%, Nike's gross margin decreased by 300 basis points in Q2 due to weak direct sales and higher tariffs in North America, leading to a 32% year-over-year decline in net income, reflecting significant pressure on profitability.
- Cautious Future Outlook: Nike expects Q3 revenue to decline year-over-year, with gross margins contracting between 175 and 225 basis points, as management emphasizes ongoing structural and transitional challenges, indicating a long road to recovery ahead.
See More
Lululemon Faces Stock Decline Amid Growth Potential
- Performance Stability: Lululemon's latest quarter saw a 7% year-over-year increase in net revenue to $2.6 billion, indicating stability in overall demand trends despite stock price declines and market concerns.
- Regional Revenue Disparity: The Americas segment experienced a 2% year-over-year decline in net revenue, while international revenue surged by 33%, highlighting potential impacts on future performance due to weakness in this core market, which accounts for 68% of Q3 revenue.
- Gross Margin Contraction: The third-quarter gross margin contracted by 290 basis points to 55.6%, primarily due to tariffs and markdowns, reflecting challenges in cost management for the company.
- International Market Growth: Lululemon reported a 46% revenue increase in mainland China and expects full-year growth to exceed the high end of its forecast of 20%-25%, showcasing strong global brand momentum despite poor performance in the U.S. market.
See More
Lululemon Founder Chip Wilson Blasts Board Over Quality Control Issues, Stock Drops 1.84%
- Quality Control Crisis: Lululemon founder Chip Wilson has criticized the board for declining product quality, particularly citing the operational failure of the ‘Get Low’ line being pulled after just three days, which undermines brand image and consumer trust.
- Stock Reaction: Following Wilson's comments, Lululemon's stock dropped 1.84% to $191.07 on Friday afternoon, indicating market concerns over corporate governance and future outlook, which may further erode investor confidence.
- Proxy Fight: Wilson has initiated a proxy contest to replace current board members with his own nominees, demonstrating his dissatisfaction with the company's governance and his intent to reshape the brand's direction.
- Cultural Decay Allegations: Wilson argues that the current leadership prioritizes corporate bureaucracy and a diluted brand identity over technical excellence and high-performance fabrics, suggesting that this cultural decay could further weaken Lululemon's position in a competitive market.
See More
Lululemon (LULU) Faces Scrutiny Over 'Get Low' Collection Amid E-Commerce Sales Pause
- Product Development Investigation: Levi & Korsinsky is investigating Lululemon's product development processes and supply chain management following a pause in e-commerce sales for the 'Get Low' collection, which may undermine investor confidence.
- Intensifying Market Competition: The global athleisure market, valued at approximately $350 billion, presents Lululemon with fierce competition from Nike, Adidas, and emerging direct-to-consumer brands, necessitating enhanced brand differentiation to maintain market share.
- Quality Control Issues: The new collection has faced customer dissatisfaction due to quality control problems, with consumers noting that the leggings become overly revealing during activities like squatting and bending, potentially leading to a decline in sales.
- Historical Lessons: Lululemon previously withdrew its 'Breezethrough' leggings in 2024 due to quality issues, and this incident could repeat itself, impacting brand reputation and future product launch plans.
See More
Michael Burry Sees Acquisition Potential in Lululemon
- Investor Interest: Renowned investor Michael Burry labeled Lululemon (LULU) as a “tempting” acquisition candidate, indicating a growing interest in the company for private equity buyouts, which may attract more investor attention.
- Increased Holdings: Burry initiated a 50,000 share position in Lululemon through Scion Management in Q2 2025 and doubled it to 100,000 shares in Q3, raising its portfolio weight to approximately 2%, reflecting his confidence in the company.
- Strong Financials: At the end of Q3, Lululemon held $1 billion in cash and cash equivalents, with the capacity to borrow an additional $593 million under its revolving credit facility, indicating robust financial health and the ability to navigate market fluctuations.
- Stock Price Volatility: Despite a 42% decline in Lululemon's stock price over recent months, shares rose 3% on Monday, suggesting a potential reassessment of the company's future prospects, which may present buying opportunities for investors.
See More
Nike and Lululemon Struggle Amid Consumer Spending Challenges
- Stock Performance Comparison: Nike's stock has dropped about 63% from its previous highs, with a 13% decline over the past 12 months, while Lululemon has seen a 50% drop, indicating Nike's relative resilience amid market volatility.
- Revenue Pressure Analysis: Both companies face revenue pressures from tariffs and soft demand, with Nike reporting a 16% year-over-year sales decline in Greater China, while Lululemon achieved a 7% revenue increase in the last quarter, showcasing its stronger recovery potential.
- Inventory Management Advantage: Lululemon successfully sold excess inventory during the holiday season, positioning itself with leaner inventory ahead of the spring product refresh, which could help tighten margins by avoiding promotional sales pressure.
- Valuation Comparison: Lululemon's forward price-to-earnings ratio is around 15, significantly lower than Nike's 42, indicating that Lululemon shares are perceived as better value in the current market environment.
See More
Nike Stock Continues Decline, Market Outlook Worrisome
- Performance Decline: Nike's revenue increased only 1% year-over-year in Q2 of fiscal 2026, while direct-to-consumer sales fell 8%, indicating weakness in its core business that could impact future profitability.
- China Market Challenges: Revenue in Greater China dropped 17% year-over-year, significantly worse than the 9% decline in Q1, suggesting that Nike is losing market share to competitors like Lululemon, which is experiencing strong growth in the region.
- Margin Pressure: Although wholesale revenue rose 8%, Nike's gross margin decreased by 300 basis points in Q2 due to weak direct sales and higher tariffs in North America, leading to a 32% year-over-year decline in net income, reflecting significant pressure on profitability.
- Cautious Future Outlook: Nike expects Q3 revenue to decline year-over-year, with gross margins contracting between 175 and 225 basis points, as management emphasizes ongoing structural and transitional challenges, indicating a long road to recovery ahead.
See More
Lululemon Faces Stock Decline Amid Growth Potential
- Performance Stability: Lululemon's latest quarter saw a 7% year-over-year increase in net revenue to $2.6 billion, indicating stability in overall demand trends despite stock price declines and market concerns.
- Regional Revenue Disparity: The Americas segment experienced a 2% year-over-year decline in net revenue, while international revenue surged by 33%, highlighting potential impacts on future performance due to weakness in this core market, which accounts for 68% of Q3 revenue.
- Gross Margin Contraction: The third-quarter gross margin contracted by 290 basis points to 55.6%, primarily due to tariffs and markdowns, reflecting challenges in cost management for the company.
- International Market Growth: Lululemon reported a 46% revenue increase in mainland China and expects full-year growth to exceed the high end of its forecast of 20%-25%, showcasing strong global brand momentum despite poor performance in the U.S. market.
See More
Lululemon Founder Chip Wilson Blasts Board Over Quality Control Issues, Stock Drops 1.84%
- Quality Control Crisis: Lululemon founder Chip Wilson has criticized the board for declining product quality, particularly citing the operational failure of the ‘Get Low’ line being pulled after just three days, which undermines brand image and consumer trust.
- Stock Reaction: Following Wilson's comments, Lululemon's stock dropped 1.84% to $191.07 on Friday afternoon, indicating market concerns over corporate governance and future outlook, which may further erode investor confidence.
- Proxy Fight: Wilson has initiated a proxy contest to replace current board members with his own nominees, demonstrating his dissatisfaction with the company's governance and his intent to reshape the brand's direction.
- Cultural Decay Allegations: Wilson argues that the current leadership prioritizes corporate bureaucracy and a diluted brand identity over technical excellence and high-performance fabrics, suggesting that this cultural decay could further weaken Lululemon's position in a competitive market.
See More
Lululemon (LULU) Faces Scrutiny Over 'Get Low' Collection Amid E-Commerce Sales Pause
- Product Development Investigation: Levi & Korsinsky is investigating Lululemon's product development processes and supply chain management following a pause in e-commerce sales for the 'Get Low' collection, which may undermine investor confidence.
- Intensifying Market Competition: The global athleisure market, valued at approximately $350 billion, presents Lululemon with fierce competition from Nike, Adidas, and emerging direct-to-consumer brands, necessitating enhanced brand differentiation to maintain market share.
- Quality Control Issues: The new collection has faced customer dissatisfaction due to quality control problems, with consumers noting that the leggings become overly revealing during activities like squatting and bending, potentially leading to a decline in sales.
- Historical Lessons: Lululemon previously withdrew its 'Breezethrough' leggings in 2024 due to quality issues, and this incident could repeat itself, impacting brand reputation and future product launch plans.
See More
