Lululemon’s US growth sours as athleisure rivals like Alo and Vuori make strides

When life gives you Lululemons… Lululemon is one of the S&P 500’s worst-performing stocks this year (down nearly 40%), and investors are worried that the downward dog trajectory could continue. The hot-yoga staple has been struggling with cold growth in North America, its largest market. This month, Lulu reported flat comparable sales growth in the “Americas” unit, which makes up over 70% of its quarterly revenue (though sales outside America grew 25%). The legging legend gave a weak forecast for this quarter as competition heats up at home.

The Alo effect… Lulu was riding high during the pandemic as folks wore its comfy fits for at-home yoga, grocery runs, and work-from-couch sessions. It’s not that workout sets aren’t cool anymore — it’s that there are more cool workout sets. Lulu was the athleisure go-to for years, but now it has some sweat-worthy competition. Since the pandemic, prestige athleisure brands Alo and Vuori have made big gains in the space with #buttery matching sets, which often cost at least $150.

• Alo gained trendy status as celebs like Taylor Swift and Hailey Bieber were photographed wearing its leggings. It has enlisted influential brand ambassadors
  including Kendall Jenner.

• Vuori, which hit a $4B valuation after a $400M SoftBank investment, made ads starring LSU gymnast Livvy Dunne and has had its men’s apparel sported by stars like Zac Efron.

• Too close for comfort: A whopping 90% of Vuori stores and 84% of Alo stores operate within half a mile of a Lululemon location. Both are rapidly expanding their footprints.