Lululemon is straying far from its yoga roots, and it could hurt the business, analysts say.
In a Wednesday note, Jefferies analysts identified several issues with the Vancouver-based athleisure brand’s offerings. The analysts visited two Lululemon stores, one in Westport, Connecticut, and another in Coral Gables, Florida, to weed out product problems.
For one, the analysts said Lululemon was leaning too heavily into large logos to sell its products, and straying far from its yoga roots.
“LULU continues to stray further away from its yoga-inspired roots to designs similar to general apparel brands like the Gap,” the note said.
They said Lululemon was trying to introduce new colors and products to solve its product struggles, but this resulted in a “disjointed assortment that’s failing to convert.”
Lululemon’s comparable sales in the Americas in the first quarter of 2025, which ended on May 4, decreased 2% compared to the year before. Its stock is down more than 38% from the start of the year.
Chip Wilson, Lululemon’s founder and the brand’s former CEO, also said in a Forbes interview last January that the brand’s offerings were becoming like the Gap.
“They’re trying to become like the Gap, everything to everybody. And I think the definition of a brand is that you’re not everything to everybody,” Wilson said to Forbes.
The Jefferies note added that new designs at the two stores in Connecticut and Florida featured “loud colors and large logos in an attempt to sell beyond their core customer and attract younger shoppers.”
“Color Palette Goes Sesame Street,” the analysts said of Lululemon’s new colors. The note came with pictures of bright purple, pink, yellow, and blue clothing items on store shelves.
They said the new products, instead of attracting new buyers, will alienate Lululemon’s base consumers and quickly end up on sales racks.
This was another problem the analysts raised — the excessive number of items on sale in the two stores. They found seven and 11 sales racks in the Coral Gables store and the Westport outlet, respectively, and over 1,000 items on sale on the brand’s website.
“It is becoming evident that the company is struggling with sell through and is resorting to markdowns to clear inventories,” the analysts wrote in the note.
To be sure, some retailers try to clear stock in the summer to make way for new items for the back-to-school shopping rush.
And the long-awaited Align No Line leggings, which are Lululemon’s bestseller yoga leggings without front seams, were out of stock in both the stores the analysts visited, the note said.
The Jefferies note comes shortly after Lululemon sued Costco for ripping off the designs of some of its bestsellers, like its Define jackets and ABC pants. In the 49-page filing on June 27, Lululemon said Costco had created “confusingly similar” dupes of its products.
Representatives for Lululemon did not respond to a request for comment from Business Insider.
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