lululemon athletica inc. LULU has been taking steps to restore its pricing power; however, this will take time with disciplined execution. The pricing power weakened in 2025, reflected by higher markdowns. This suggests the company relied more heavily on discounts than it typically would, thereby weakening its premium brand positioning in the near term.
To offset this, the company has been restoring full-price sales, which remains a top priority. LULU’s strategy centers on reducing markdowns, tightening inventory and increasing product newness. The company expects full-price trends to stabilize around the second quarter and turn positive in the second half of fiscal 2026, with a structured recovery rather than an immediate rebound.
A key driver of this effort is product innovation and assortment refinement. The company is also reducing SKUs and curating a more focused assortment to enhance product visibility and desirability. This approach is crucial, as pricing power in the premium apparel segment is mainly owing to product differentiation, uniqueness and innovations.
Overall, lululemon’s ability to command premium pricing has been facing some temporary pressure. The company’s action plan, centered on innovation, disciplined inventory management and reduced markdowns, provides a clear pathway to restoring pricing strength. Success will ultimately hinge on sustained product appeal and the company’s ability to revive demand in its core North American market while preserving its premium brand image.