Lululemon Slashes Full-Year Guidance as Americas Sales Slide: What It Means for Textile Supply Chains

Lululemon's first-quarter revenue decline in the Americas has forced the company to slash its full-year guidance for fiscal year 2026, sending ripples through the textile supply chain. While global revenue still grew—driven by international markets—the core North American region's weakness is a clear warning for premium activewear fabric suppliers.

For textile manufacturers in China and Vietnam, where Lululemon sources most of its high-end knits, this means potential order reductions in the coming quarters. Fabrics like Nulu and Everlux, which rely on high-tenacity nylon and elastane, are particularly vulnerable. Mills running these specialty lines may face lower capacity utilization and margin compression.

Demand Slowdown and Inventory Pressure

Lululemon's decision to lower its FY26 forecast stems directly from a Q1 sales slump in the Americas, a region that typically accounts for over 70% of total revenue. The company also indicated plans to slow inventory growth, which historically leads to fewer new purchase orders and longer lead times for existing contracts.

The impact is already visible in export data. According to public customs figures, China's knitted activewear exports to North America grew only in the single digits in Q1 2025, down from over 15% in the same period last year. Dyeing and finishing mills in Shaoxing and Fujian report fewer sample requests from sportswear brands and increased price sensitivity.

Raw material prices—nylon 66 and spandex—have remained stable so far in 2025, but sustained demand weakness could push suppliers to offer discounts. Industry estimates suggest premium activewear fabric prices may drop 3-5% by the end of the year.

This is not an isolated case. Nike also lowered its annual guidance earlier this year. Together, these two brands account for roughly a quarter of global high-end activewear fabric procurement. The sector is clearly entering a destocking and cost-control phase.

Practical Recommendations

For Buyers - Reassess safety stock levels: Shorten replenishment cycles from 90 to 60 days for Lululemon-related orders to reduce capital lock-up. - Diversify client base: Increase collaboration with domestic Chinese brands (e.g., Anta, Li-Ning) or European niche labels to offset North American volatility. - Prioritize innovation: During downturns, brands focus on high-value features like recycled materials and functional coatings. Source suppliers with R&D capabilities in these areas.

For Exporters - Tighten payment terms: Require 30% deposit and 70% against copy of B/L for North American customers. - Explore Southeast Asia: Vietnam and Indonesia still see growing processing demand; consider redirecting some capacity to serve local brands. - Build agility: Brands will likely shift toward smaller, more frequent orders. Invest in flexible production lines to accommodate quick-turnaround runs.