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CNBC Finance

Lululemon cuts annual outlook, citing 'negative' media commentary and disappointing product launches

The athletic apparel retailer lowered its full-year guidance and issued a weak current-quarter outlook on Thursday as interim CEO Meghan Frank blamed "negative commentary in the media" and recent product launches that failed to wow shoppers. "We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top line performance," Frank told analysts during the company's earnings call while explaining why the company's performance declined at the end of its fiscal first quarter. "And second, not all of our product launches have met our expectations. While we've had several successful launches so far this year, we've seen others as we start Q2 not generate the anticipated guest response." When pressed on what specific negative commentary led to a decline in sales, Frank pointed to Lululemon's proxy contest with founder Chip Wilson, who was outspoken in his criticism of the brand, as well as "questions about the composition" of some of its products. "These stories have died down and subsided," said Frank. "But we have not yet seen a return to our pre-disruption ... trends." She said the company is "not sitting still" and is "moving with urgency to make the necessary adjustments to reaccelerate momentum, particularly in North America." The company's shares dropped 11% in extended trading following the report. Lululemon's stock has plunged about 40% this year as of Thursday's close. Lululemon is now expecting fiscal 2026 sales to be between $11 billion and $11.15 billion, down from a previous range of between $11.35 billion and $11.50 billion. Analysts were expecting full-year sales of $11.48 billion, according to LSEG. Lululemon also cut its earnings guidance by more than $1 per share. It's now expecting earnings per share to be between $10.95 and $11.15 for the year, down from a previous range of $12.10 to $12.30. Analysts were expecting $12.30 per share, according to LSEG. The current quarter doesn't look much better. Lululemon is expecting sales to be between $2.45 billion and $2.48 billion, below expectations of $2.60 billion, according to LSEG. It's expecting earnings per share to be between $1.76 and $1.81, well below expectations of $2.68, according to LSEG. While Lululemon's guidance failed to meet forecasts, it did beat expectations on the top and bottom lines during its fiscal first quarter, albeit on expectations that have come down significantly since the retailer last reported earnings. Here's how the company performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG: The company's reported net income for the three-month period that ended May 3 was $195 million, or $1.69 per share, compared with $314.6 million, or $2.60 per share, a year earlier. Sales rose to $2.47 billion, up about 4% from $2.37 billion a year earlier. Comparable sales grew 1%, better than expectations of 0.4%, according to LSEG.

Lululemon cuts annual outlook, citing 'negative' media commentary and disappointing product launches
North America
CNBC Economy

The May jobs report will be released Friday. Here's what to expect

The stronger-than-expected start this year for job creation could be in for a reality check when the Bureau of Labor Statistics releases the May nonfarm payrolls report Friday. Economists surveyed by Dow Jones expect the employment rolls to show that just 80,000 jobs were added during the month, which would mark a notch step down from the average of 150,000 over the prior two months, including 115,000 in April. Moreover, some prominent Wall Street voices think the month could feature some catch-up for a labor market that was teetering at this time last year, with risks to the downside for the headline number. "We're continuing to hear and see the low-hire, low-fire sentiment, which is that if you have a job, it's OK right now," said Laura Ullrich, director of economic research at Indeed Hiring Lab. "People are continuing this kind of job-hugging trend. But if you're looking for a job, it's a very hard time to find a job because hires are so low." Ullrich added that she "wouldn't be surprised" if the May number comes in at or below consensus. BLS data earlier this week showed a surprise jump in job openings for April, but the level of those quitting their jobs is at its lowest since August 2020, during the pandemic era. The consensus sees the unemployment rate holding steady at 4.3%. "From a macro point of view, we're going to see stagnation, because if people aren't leaving jobs and they're not creating new jobs, it's just a quite stagnant market," she said. Around Wall Street, expectations are muted as economists expect that mild weather and other seasonal factors helped boost the prior numbers other than in February, which saw a decline of 156,000 — the only negative month of the year. May saw a total 97,006 planned reductions, a 16% increase from April and the highest total for the month since 2020, when the Covid pandemic saw massive job cuts, according to Challenger, Gray & Christmas. The highest May prior to that was in 2009, around the nadir of the global financial crisis. Moreover, the firm said artificial intelligence-related announced job cuts totaled 38,242, the highest single-month total since Challenger began collecting the data about three years ago. Initial jobless claims last week posted their biggest total since early February. Goldman Sachs is expecting payroll gains of just 60,000, noting that "big data indicators of job growth we track slowed" during the month. Vanguard chief economist Adam Schickling is forecasting a mere 20,000 "as we expect a partial unwind from the strong [January]-April jobs numbers that were biased by unseasonably warm and dry weather." Likewise, EY-Parthenon is expecting growth of 50,000, which according to most estimates now is enough to keep the unemployment rate little changed from its current level, with perhaps a slight upside bias. "The step down reflects some payback from earlier weather-related strength and a still-cautious hiring backdrop," Gregory Daco, the firm's chief economist, said in a note. "We expect the unemployment rate to edge higher to 4.4%, consistent with a labor market where labor demand and supply have slowed in sync."

The May jobs report will be released Friday. Here's what to expect
North America
CNBC Economy

Long-term unemployment is surging in the U.S. There are hidden costs for workers and the economy

The 29-year-old had been employed consistently since he was a teen, first on a factory floor and most recently in medical sales. But the St. Petersburg, Florida, resident hasn't been able to start a new gig after losing his job shortly before the 2025 Thanksgiving holiday. Taylor has become part of a group of more than 1.8 million Americans classified as long-term unemployed — which the government defines as jobless for at least 27 weeks — in a given month this year. That figure is up about 45% from 2019 and 55% from 2023, a CNBC analysis of Bureau of Labor Statistics data found. "This can't go on much longer without some type of catastrophic change to my life," Taylor said. "That this era of my life could affect my long-term future — my family's future, my future children's future — is something that I go to sleep thinking about." Without a steady income, Taylor's retirement planning and long-term investing strategy has come to a "screeching halt." He's significantly cut back on spending for everything from food to social experiences to make ends meet. Taylor said he's applied to around 100 jobs and has completed several interviews to no avail. On a macro level, the growing number of Americans in this boat raises red flags about the strength of the labor market and overall economy. For the long-term unemployed, it can have ramifications on financial, emotional and family health that linger even after they reenter the workforce. "It tells us a lot about economic health," said Cory Stahle, an economist at job site Indeed. "It tells us about how good of a job the labor market is doing at absorbing people." The long-term unemployed account for roughly one out of every four jobless workers, according to the latest available U.S. government data. Friday's nonfarm payroll report will offer a fresh reading of the U.S. labor force's makeup. Reports released this week on job openings and private payrolls came in stronger than economists anticipated. Long-term unemployed workers' pay was approximately 32% lower after a decade than those who had not lost work, according to a working paper from the Boston Federal Reserve. Those who were unemployed for shorter periods took a 9% cut over the same time frame. Studies also show there may be a link between long-term unemployment and depression. A Pew Research report found that the long-term unemployed were over two times more likely to seek professional help for depression or other mental health challenges compared with those without work for under three months. "Other than the death of a family member or a close friend, this is one of the most devastating things that people face," said Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University. "It's a very serious health problem and an economic problem." Research also shows how unemployment — particularly over long stretches — can negatively impact families and communities. Parental job loss increases the chance that their child will repeat a grade by about 15%, a working paper found. A study of Wisconsin state data found workers displaced in their prime years are less likely to participate in social and community events. Communities with a larger percentage of long-term unemployed people have a higher rate of crime and violence, the Urban Institute reported.

Long-term unemployment is surging in the U.S. There are hidden costs for workers and the economy
North America
CNBC Finance

Soaring stocks created 2 million new millionaires around the world last year

Soaring stock markets created nearly 2 million new millionaires around the world last year, with the ultra rich seeing the strongest growth, according to a new study. The population of global millionaires surged 7.9% to 25.3 million in 2025, according to the Capgemini World Wealth Report. Their total wealth increased by 8.7% to $98.3 trillion, marking the fastest growth in five years. At the same time, a wealth gap between millionaires and the ultra wealthy continues to widen. The increasing wealth of millionaires — defined by Capgemini as those with $1 million or more in investible assets, excluding primary home, collectibles and consumer goods — was outpaced by the growth of so-called "ultra-high-net-worth individuals (UHNWI)," or those with $30 million or more. The population of UHNWIs grew 9.4% in 2025, to 250,000, and their fortunes rose 9.7%, according to the report. UHNWIs now represent 1% of the overall millionaire population, but they hold 35% of all millionaire wealth, according to the study. Gareth Wilson, global banking industry lead at Capgemini, said one reason the ultra wealthy are outpacing millionaires is their access to higher-returning private investments. "They have access to investments and opportunities that aren't afforded even to the millionaires next door, whether it be pre-IPO investments or private markets," Wilson said. "When you look at those individuals who have investable assets at that scale, they probably have more influence in terms of access to some of the hedge funds, access to the private markets, and they're probably afforded access to some other kind of pre-IPO investments that us mere mortals probably don't even know about." Geographically, the U.S. continues to power much of the global millionaire growth. The U.S. added 730,000 new millionaires in 2025, bringing the total U.S. millionaire population to 8.73 million, according to the report. Their fortunes surged by nearly $3 trillion to $31.3 trillion. Asia also posted strong growth, with its millionaire wealth up 10.5% and millionaire population up 9.4%. While China had been the main growth engine for Asian wealth for years, Korea and Taiwan are now leading Asian wealth creation, as the Korean stock market surged 76% last year and semiconductor stocks powered Taiwanese markets higher. Asia's total millionaire population reached 8.3 million in 2025, according to the report. Europe's millionaire population grew 6.5%, while Latin America's rose 0.3% and the Middle East saw a decline of 1.4%. When it comes to their investments, the world's millionaires are increasing their holdings of stocks. They held an average of 25% of their portfolios in stocks in 2025, up from 22% in 2024 — most likely due to rising share prices. Their share of alternatives declined to 12% from 15% and their cash holdings also fell to 24% from 26%. Their holdings of fixed income increased from 18% to 20% and their real estate investments remained flat at 19%. The increased holdings of stocks and drawdowns in cash point to a continued "risk on" attitude among millionaire investors. With markets coming off three years of double-digit gains, investors are more fearful of missing out on a bull run than they are of losses. "The equities performance is encouraging the movement from lower-risk to higher-risk investments," Wilson said. "I would say we've probably seen an increase in the risk appetite, and we've also seen the high-net-worth individuals follow the money in terms of equity performance."

Soaring stocks created 2 million new millionaires around the world last year
North America
CNBC Finance

Trump's 'big beautiful bill' has a 'double taxation' trap for top earners, tax experts say

The "one big beautiful bill" came with many tax benefits for top earners, despite limiting how much they can deduct. However, lawyers and accountants for the wealthy said they have discovered a surprise buried in the footnotes of a tax law guide released last week by Congress' policy staff that could amount to double taxation. The deduction cap is imposed on trusts and estates, the experts said, which was unexpected. Even if a trust gave all its income to its beneficiaries, it would have to pay taxes on a portion of that income, according to their interpretation of the document. While the consequences are steeper for trusts and estates of the ultra-wealthy, trusts with as little as $16,000 in income would also be subject to additional taxes, the experts said. "There is potentially an element of double taxation," said Dan Griffith, director of wealth strategy at Huntington Bank. "This is something that is going to affect somebody with a $400,000 special-needs trust. It's not just going to be something that $100 million dynasty trusts suffer with." Griffith said he is especially concerned about trusts that are obligated to distribute all their income. Trusts will either have to sell assets to pay the taxes, sacrificing future investment returns, or reduce their distributions to beneficiaries, he said. This provision creates a "mathematical nightmare" for tax lawyers and financial advisors, according to Justin Miller, national director of wealth planning at Evercore Wealth Management. Miller gave the example of a wealthy couple wishing to leave their estate to charity. "If I have to pay income taxes, that means I'm giving less money to charity because I'm giving money to the IRS. That means I now have to adjust my deduction even more because less money is going to charity," he said. "Did Congress really intend to create an algebraic formula?" Historically, trusts and estates have been able to deduct income given to beneficiaries, which is then taxed on the individual level. This distribution deduction is designed to make sure income is only taxed once. However, the new deduction limitation on top-earning individuals now applies to trusts and estates, according to a footnote in the Joint Committee on Taxation's recent tax explainer, better known as the Bluebook. The JCT is nonpartisan and serves to explain legislation. The One Big Beautiful Bill Act's limit on itemized deductions means that taxpayers in the top bracket only get a deduction benefit of 35 cents for every dollar, rather than 37 cents. It applies to charitable deductions, and experts say it has already influenced how top earners give. While the Bluebook is an interpretation of the OBBBA rather than law in and of itself, this provision is causing concern in the financial advisory community, according to Robert Keebler, a certified public accountant. For instance, he frequently sets up trusts for clients on their second marriages that will provide their surviving spouse with income but leave the remainder for children from the first marriage. Consider a trust that distributes all $370,000 of its net income to a widow, he said. Applying the deduction limit to trusts means that the trust can only deduct $350,000 from its distributable net income and $20,000 would be subject to taxes, even though the widow is taxed on the entire $370,000, according to Keebler. To pay the tax, the trust either has to dip into its corpus, reducing the children's future benefit, or get permission to give less to the spouse, which can require going to court.

Trump's 'big beautiful bill' has a 'double taxation' trap for top earners, tax experts say
North America
CNBC Economy

U.S., Iran intensify attacks as ceasefire frays, peace talks stall

Iran struck Kuwait International Airport early Wednesday, killing one person and injuring others, Kuwait's Ministry of Foreign Affairs said. The attack, which Iran's Islamic Revolutionary Guard Corps reportedly denied responsibility for, is the latest blow to an already weakened ceasefire agreement that has been repeatedly undermined by military action in recent days. While the Trump administration says the ceasefire remains in place, attacks have escalated as the war proceeds into its fourth month. President Donald Trump did not answer directly when asked at the White House on Wednesday afternoon if the ceasefire was still on in light of the Kuwait attack. "You know, there's a reason for everything," Trump said. "And we hit them pretty hard the night before, and actually last night." He added, "A ceasefire there is much different than a ceasefire in other parts of the world." The Kuwaiti foreign affairs ministry in a translated statement Wednesday morning condemned "the brutal and ongoing Iranian attacks using ballistic missiles and drones" against "civilian and vital facilities," including the latest strike on the airport. The IRGC claimed the attack was caused by a U.S. military systems error, Iran's state-affiliated news outlet Tasnim reported, citing a spokesman for the military branch. One day earlier, U.S. Central Command said it defeated multiple Iranian ballistic missiles and drones, and launched "self-defense strikes" on Qeshm Island in the Persian Gulf, in response to "attempted attacks" by Tehran. Iran had launched "several" ballistic missiles toward regional neighbors, though none hit their intended targets, CENTCOM said in a statement. Two Iranian missiles fired at Kuwait fell short or broke apart en route, and three missiles launched at Bahrain were immediately intercepted by U.S. and Bahrain air defense forces, it said. The U.S. also shot down three one-way attack drones launched by Iran toward civilian mariners that were transiting regional waters, according to CENTCOM. No U.S. personnel were harmed, the statement said. The U.S. and Iran appear locked in a volatile stalemate, as ongoing efforts to reach a peace deal have been punctuated by public diplomatic disputes and military action.

U.S., Iran intensify attacks as ceasefire frays, peace talks stall
North America
CNBC Economy

Private payrolls grew by 122,000 in May, stronger than expected, ADP reports

Private hiring expanded at a brisk pace in May, providing further indication of a stable labor market, ADP reported Wednesday. The payrolls processing firm said companies added 122,000 workers for the month, up from 105,000 in April and better than the Dow Jones consensus estimate for 110,000. May marked the strongest month since January 2025. April's total was revised down by 4,000. Unlike prior months, where job growth was concentrated in healthcare and a few other sectors, gains were more broad-based. Eight of the 10 sectors ADP tracks saw gains, and hiring was spread evenly both by company size and geography. Education and health services again led with 57,000 hires, but trade, transportation and utilities added 36,000, professional and business services contributed 11,000, and construction and leisure and hospitality both rose by 8,000. Information services lost 9,000, a possible impact from artificial intelligence growth, while natural resources and mining also reported a loss, down 3,000. "Hiring was more broad-based in May than we've seen in the last few years," said ADP's chief economist, Nela Richardson. "The labor market continues to show sustained momentum going into the summer hiring season." Companies with fewer than 50 employees led with 67,000 new hires while those with 500 or more added 40,000 and medium-sized firms contributed 17,000. On salary, annual pay rose 4.4% for those staying in their jobs, the same as April, while job-switchers saw pay growth edge down to 6.5%. Stock market futures were mixed following the release while Treasury yields were higher. The report comes two days ahead of the Bureau of Labor Statistics' release of nonfarm payrolls for May. The Wall Street consensus is for growth of 80,000 after April's 115,000, with the unemployment rate steady at 4.3%. Federal Reserve officials will be watching the jobs numbers closely ahead of their June 16-17 policy meeting. Markets are pricing in a virtual certainty that the central bank will hold its benchmark interest rate in a range between 3.5%-3.75%. Get this delivered to your inbox, and more info about our products and services.

Private payrolls grew by 122,000 in May, stronger than expected, ADP reports
North America
CNBC Economy

U.S. proposes fresh tariffs on 60 economies over forced labor trade practices

The Office of the U.S. Trade Representative has proposed additional tariffs of up to 12.5% on imports from 60 economies over their failure to ban goods made with forced labor, in a sweeping action that would hurt most trading partners, including China, the European Union and Japan. The determination, made under Section 301 of the Trade Act of 1974, found that all 60 countries have failed to impose or effectively enforce a prohibition on forced labor-related imports, creating what it called an "unlevel playing field" for American workers. USTR has proposed a 10% duty rate for economies that have adopted a full or partial prohibition on forced labor trade, and 12.5% for all other economies. The trade authority also proposed a separate textile mechanism that would allow for a certain volume of apparel and textile imports from some economies to enter the U.S. at reduced rates. Written comments for the proposal are due by July 6, with public hearings scheduled on July 7, according to the notice. "The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field," said U.S. Trade Representative Jamieson Greer. "We will no longer tolerate this disparity." The proposal comes after the U.S. Supreme Court struck down most of President Donald Trump's "Liberation Day" tariffs earlier this year, prompting him to to impose 10% global baseline duties under Section 122 — which are also set to expire in July. The Section 301 authorizes the president to impose levies to counter unfair foreign trade practices harming U.S. commerce. An EU spokesperson described the reasoning behind the latest barrage of U.S. tariffs as "unjustified." "On the EU side, we are on track to ensure implementation of our Joint Statement tariff commitments by the end of June," they added in comments reported by Reuters. While the Supreme Court setback helped slow down the tariff timeline, it has not "de-fanged" the president's agenda, said Nick Marro, principal at Economist Intelligence Unit, who expects the Trump administration to unleash further investigations and tariff announcements in preparation for renewed rounds of trade talks. The impact of proposed tariffs will, however, likely be softened by significant exemptions on goods including electronics and artificial intelligence-related products, Marro added. While the tariff rates under Section 301 may be further adjusted, any meaningful changes will reshape global supply chains by creating different economic incentives for firms, said Deborah Elms, head of trade policy at the Hinrich Foundation.

U.S. proposes fresh tariffs on 60 economies over forced labor trade practices
North America
CNBC Economy

Job openings in April surged to 7.6 million, the highest in nearly two years

Job openings hit their highest level in nearly two years during April while hiring fell sharply, according to a government report Tuesday that showed rising demand but also slow hiring in the labor market. The Bureau of Labor Statistics reported that available employment hit 7.6 million for the month, a surge of 731,000 from the prior month and the highest level since May 2024. Economists surveyed by Dow Jones had been looking for 6.8 million openings from the BLS' Job Openings and Labor Turnover Survey. The jump in openings put the available jobs above the total of unemployed workers. The rate of openings compared with the size of the labor force rose 0.4 percentage point to 4.6%. By industry, nearly all of the openings came from the professional and business services category, which added 668,000 positions, a possible indicator of the impact from artificial intelligence on labor demand. Health care and social assistance, the greatest engine of job creation, added 89,000. Financial activities saw a decline of 134,000. Most other categories reported little change. Companies hired a total 5.12 million workers during the month, a decline of 419,000 from March, taking the rate down to 3.2%, or a decline of 0.3 percentage point. However, layoffs and discharges fell slightly as well, down 192,000 to 1.7 million. Quits, a level of worker mobility and confidence in finding a new job, declined to just under 3 million, down 183,000 and the lowest level since August 2020. In broad terms, the report reflects the continuing low-hire, low-fire environment that has characterized the labor market since early 2025. Weekly jobless claims have held low except for a brief spikes while the unemployment rate has barely budged at 4.3%. "For now, the labor market remains mostly stable. With the quits rate and the layoff rate ticking down in April, neither employees nor employers are in a hurry to make moves." Matthew Martin, senior U.S. economist at Oxford Economics, said in a note. "The US/Israel-Iran war will test the labor market. Weaker household spending and uncertainty are likely to influence firms' hiring intentions." Federal Reserve officials watch the JOLTS numbers for signs of labor slack. Central bankers spent much of last year worried about weakness in the labor market but have since switched their concerns to the impacts from inflation due to tariffs and soaring energy prices. The Fed meets later this month and is widely expected to stay on hold with interest rates. Get this delivered to your inbox, and more info about our products and services. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Job openings in April surged to 7.6 million, the highest in nearly two years