Shares of Lululemon down double digits after the Athleisure brand cut its full year earnings outlook, citing economic uncertainty and tariff related costs.  Here to break down the company's latest quarter, senior reporter, Brooke DiPalma. Hey Brooke.

Certainly what we saw in this first quarter results is those mixed results were overshadowed by that Lululemon's decision to cut their second quarter and full year earnings outlook. Now, the company does expect second quarter adjusted earnings per share to fall in the range of $2.85 to $2.90, and that's far lower than what Wall Street was looking for here. They expected second quarter earnings per share to come in the range of, rather come at $3.31, and as you could see here, that then led to them cutting their full year earnings per share outlook to a range of $14.58 to $14.78, from down from $14.95 to $15.50. Now, the CEO on the call, Calvin McDonald's, called it a dynamic macro environment. He said that this, these tariffs have brought uncertainty into the retail environment as consumers really try to assess the impact that these tariffs will have on their daily life. Now, the company's guidance does assume a 30% tariff on China and a 10% tariff on all countries. He also went into weigh on the US consumer. He said, my sense is that the US consumer remains cautious right now, and they're being very intentional. We saw US same-store sales fall 2% in the first quarter, but this, this guidance that the company has put out assumes that tariffs stay as they are right now. Of course, we know that negotiations are currently underway. They still will be until July 8th, when final offer or negotiation that 90 pauses up. It assumes a 30% tariff on China, 10% tariff on all countries, and they also said they're using mitigation tactics like we've heard from so many other companies. Think pricing, think sourcing, but they did say that the second quarter guidance also reflects a higher promotional environment here in the US, citing that given consumer confidence and macro concerns as they move into the second half of the year. So, the real question here are US consumers, especially willing to pay up for Lululemon products? That is a big question here.

I mean, Canadian brand that is well positioning itself in China clearly. China mainland increased 8%. If that was one of the bright spots of this report here?

Yeah, just one of the investors certainly looking though at that outlook for sure.

Yeah, absolutely here. Look, I've got more in the we made too much that I still want to be able to purchase.

Right, right, I love though we made too much, I have to say, I mean, not good for Lululemon, inventory was up tremendously over the quarter, I think roughly more than 20%, but hey, good for us consumers. Love to shop the sales. 

They were doing a promo at my yoga studio where the first people who signed up at the studio got a free pair of leggings, and I was like, maybe that's a form of like new marketing they're trying. It's less influencer focused. I've heard them talk about that before, and more focused on regular people using the product in a class, getting people to buy more of that product.

Trying to certainly extend their customer base, but also what they've struggled with in the past is like finding that exact right price point, and also finding the exact right color as we've heard in previous quarters that consumers want to splurge for.