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## AI legalese decoder: Helping Navigate legal Jargon

By Annett Mary Manoj

### Lululemon Athletica Faces Challenges in North American Market

(Reuters) – Lululemon Athletica is forecasting annual revenue and profit below expectations due to a decline in demand for its premium athleisure products in North America. This news has resulted in the company’s shares plummeting nearly 11% in extended trading.

In the U.S., sporting retailers are grappling with excessively high inventory levels, leading to reduced orders for sportswear and apparel companies. Major players such as Adidas and Foot Locker are exercising caution in response to fluctuating consumer spending patterns.

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Lululemon’s CEO, Calvin McDonald, acknowledged that the first-quarter sales in North America have been sluggish, attributing it to a challenging consumer environment in the U.S. The company reported a modest 9% growth in fourth-quarter North American sales, significantly lower than the 29% increase seen a year earlier.

### Future Projections and Analyst Sentiments

Lululemon projects fiscal 2024 revenue between $10.70 billion and $10.80 billion, falling short of analysts’ estimates of $10.90 billion. Similarly, its profit forecast of $14 to $14.20 per share is below the expected $14.13 per share.

Insider Intelligence analyst Rachel Wolff noted that Lululemon’s weaker-than-expected forecast reflects the broader challenges faced by retailers amid price pressures and shifting consumer preferences. Meanwhile, Nike, the world’s largest sportswear maker, anticipates low single-digit revenue growth in the first half of fiscal year 2025 due to scaling back on key franchises and subdued consumer sentiment.

While Lululemon exceeded expectations with fourth-quarter revenue of $3.21 billion, driven by the success of new product offerings like Cityverse sneakers and Beyondfeel running shoes, the company remains cautious as consumer trends evolve.

Despite the positive performance in the quarter, Mari Shor, senior analyst at Columbia Threadneedle, emphasized that Lululemon is not impervious to broader market dynamics and consumer caution.

(Reporting by Annett Mary Manoj in Bengaluru; Editing by Ravi Prakash Kumar and Devika Syamnath)

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