Worst-Performing Stocks in the S&P 500 in June 2025: A Review of the Strugglers
In the second quarter of 2025, two well-known companies, Lululemon Athletica and J.M. Smucker, experienced significant setbacks. While the reasons for J.M. Smucker's performance in Q2 2025 are not yet fully understood, Lululemon Athletica's poor showing can be attributed to several factors.
Lululemon Athletica, a leading athletic apparel company, has been hit by softening US consumer spending and economic uncertainty. This has weakened demand in the company’s core North American market, causing comparable sales to grow only 1% globally and decline 2% in the Americas. Furthermore, margin compression and inventory challenges have emerged, partly due to tariffs imposed on imports, which have increased costs and pressured profitability.
The competitive athleisure market has also intensified, with new entrants putting pressure on Lululemon’s premium positioning and growth trajectory. This saturation in the US and Canadian market is a key concern for investors, causing a slowdown in revenue growth from prior double-digit rates to single-digit or low growth. Despite strong international growth, notably in China, the company’s US slowdown outweighed positive trends elsewhere, leading to downward revisions of revenue and EPS guidance for the full year.
In contrast, specific details about J.M. Smucker's Q2 2025 performance are not yet available. However, it's worth noting that the company's stock fell 12.8% to a 52-week low of $93.30 per share in June, and it reported a 3% decline in sales and a 13% decline in adjusted EPS for its fourth quarter of fiscal 2025.
Despite these challenges, J.M. Smucker continues to struggle with its sweet baked segment, which has struggled since acquiring Twinkies maker Hostess Brands in 2023. On the other hand, Lululemon Athletica's operating margin fell by 110 basis points to 18.5% in the first quarter, and same-store sales grew by only 1% year over year.
In the midst of these difficulties, Lululemon Athletica's stock plummeted over 20% on a single trading day in June, and the company slashed its earnings outlook for the full year by almost 25%. Meanwhile, the S&P 500 index rose 5% in June, but Lululemon Athletica ended the month down 25%.
However, there is a silver lining for J.M. Smucker, as its Uncrustables brand is close to hitting a billion dollars in sales. Despite the overall decline, this indicates that some parts of the company are performing well.
In summary, while Lululemon Athletica and J.M. Smucker faced challenges in Q2 2025, the reasons for J.M. Smucker's performance are not yet fully understood. Lululemon Athletica, on the other hand, has been affected by soft US consumer spending, margin compression, inventory challenges, a competitive market, and a slowdown in revenue growth.
- The performance of Lululemon Athletica in Q2 2025 can be attributed to multiple factors, including softening US consumer spending, margin compression, inventory challenges, a competitive market, and a slowdown in revenue growth.
- Investors are concerned about Lululemon Athletica's future prospects due to these challenges, leading to a significant drop in the company's stock and a downward revision of revenue and EPS guidance for the full year.
- Despite the struggles of Lululemon Athletica, managing finances and investing in businesses that show resilience, such as J.M. Smucker's Uncrustables brand, could prove to be promising opportunities in the stock-market.
