Lululemon files lawsuit against Costco, claims company is selling 'dupes' of some of its products
Lululemon Athletica claims in its lawsuit filed in the U.S. District Court for the Central District of California that Costco has 'unlawfully traded' on its reputation, goodwill and sweat equity by selling unauthorized and unlicensed apparel that uses knockoff, infringing versions of its patents.
Lululemon alleges that Costco is known to use manufacturers of popular branded products for its private label Kirkland brand, but that the company and the manufacturers don't tell consumers of the connection between them for many of the Kirkland-branded products. Because of this, Lululemon claims this leads at least some shoppers to believe that Kirkland-branded products are made by the authentic supplier of the 'original' products. Lululemon claims Costco doesn't try to dispel the ambiguity.
'As an innovation-led company that invests significantly in the research, development, and design of our products, we take the responsibility of protecting and enforcing our intellectual property rights very seriously and pursue the appropriate legal action when necessary,' a Lululemon company spokesperson said in a statement.
Some of the products Lululemon says Costco is making duplicates of include its popular Scuba hoodies, Define jackets, and ABC pants.
Lululemon claims one of the duplicates that Costco sells is the Hi-Tec Men's Scuba Full Zip, with the lawsuit showing a screenshot image of Costco's website showing the item priced at $19.97. Lululemon sells several men's jackets that cost more than $100 each.
Costco, based in Issaquah, Washington, did not immediately respond to a request for comment on Tuesday.
Lululemon is requesting a jury trial and wants Costco to stop selling the products that it considers to be duplicates. It is also seeking an unspecified amount in monetary damages.
Lulemon was in a similar legal dispute with Peloton in 2021. Two years later the companies announced a five-year partnership that included Lululemon becoming the primary athletic apparel partner to Peloton.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 hours ago
- Yahoo
Jim Cramer Says 'I Don't Want You to Get Married to lululemon'
lululemon athletica inc. (NASDAQ:LULU) is one of the stocks Jim Cramer shared insights on. Noting that they have three LULU shares with an average cost basis of 236, a young caller asked if they should add to their position to bring their cost basis down. Cramer commented: 'Wow. You know… I don't want to, like, Harrison's obviously got horse sense. This is a really tough question because it is one of the five worst-performing stocks, I think, this year. I'll tell you this, it's down so low, I would be willing to take a flier. Why? Because you're young. You got your whole life ahead of you. I think it's worth it. To see lululemon down 43% this year, says to me, I want you to buy one share, but then you gotta wait… because I don't want you to get married to lululemon.' Eric Broder Van Dyke/ lululemon (NASDAQ:LULU) designs and sells athletic apparel, footwear, and accessories for both men and women, focusing on activities like yoga, running, and training. While we acknowledge the potential of LULU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 hours ago
- Yahoo
Why Shares of Peloton Are Surging This Week
Key Points Analysts at UBS upgraded Peloton stock to a buy rating. They see improving trends in the business and are modeling much high EBITDA in fiscal 2026 than consensus Wall Street estimates. 10 stocks we like better than Peloton Interactive › Since the close of trading last Friday, shares of Peloton (NASDAQ: PTON) have surged about 10%, as of 1:24 p.m. ET Thursday. Shares are largely moving higher due to a recent Wall Street analyst report that upgraded the stock. Signs of improvement Peloton, a maker of exercise equipment and content, has seen its stock get absolutely crushed since the main years of the pandemic, as people returned to the gym following the reopening of the economy, among other issues. But now shares are attractively priced, according to UBS analyst Arpine Kocharian, who upgraded the stock to a buy rating and raised the price target from $7 to $11.50. "We see subscription price increases anchoring near-term top line growth, we might also see underlying net subscriber decline stabilizing, outside of price increase driven churn," Kocharian wrote in her research note. "While that inflection in connected fitness subs is not entirely clear to us yet, we are seeing better data trends for Peloton in terms of traffic and active users." Kocharian is modeling $90 million to $100 million in annualized revenue from increases in subscription pricing. The UBS team is also modeling for EBITDA (earnings before interest, taxes, depreciation, and amortization) to come in between $400 million and $450 million in fiscal year 2026, significantly higher than consensus estimates. Attractive valuation At a roughly $2.5 billion market cap, the stock trades at less than 7 times' Kocharian's EBITDA forecast. However, investors should keep in mind that Kocharian is much higher than other analysts on her projection. While Peloton will likely never be the darling it was during the pandemic, the fundamentals do seem to be improving. Peloton is certainly not one of my favorite stocks in the market, but the risk-reward proposition has improved, which is why I think interested investors can start to nibble on the stock. Should you buy stock in Peloton Interactive right now? Before you buy stock in Peloton Interactive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Peloton Interactive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,629!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,098,838!* Now, it's worth noting Stock Advisor's total average return is 1,049% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Peloton Interactive. The Motley Fool has a disclosure policy. Why Shares of Peloton Are Surging This Week was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
9 hours ago
- Yahoo
Is the Party Over for Lululemon Stock?
Key Points Lululemon's stock has plunged nearly 60% from its all-time highs. It's struggling with tough competitive and macro headwinds. The stock looks cheap, but it could deserve that discount valuation. 10 stocks we like better than Lululemon Athletica Inc. › Lululemon (NASDAQ: LULU) stock closed at its all-time high of $511.29 on Dec. 29, 2023. That 5,581% gain from its split-adjusted IPO price of $9 in July 2007 would have turned a $10,000 investment into $568,100. The yoga and athletic apparel retailer impressed the bulls with its resilience during the early days of the pandemic and its ambitious growth plans. But today, Lululemon's stock trades at about $220. It lost its luster as its North American growth stalled out and it faced tougher competition from smaller and cheaper brands, and tariffs exacerbated that pressure. So is the party over for this former high-growth stock? What happened to Lululemon over the past three years? Lululemon established an early mover's advantage in the premium yoga apparel space, and it profited from the rapid growth of the athleisure market. It expanded its digital marketplace and opened more brick-and-mortar stores to boost its direct-to-consumer sales, and it used free yoga classes and other community events to lock in its customers. Back in 2019, Lululemon launched its "Power of Three" plan to double digital revenues, double its men's revenues, and quadruple its international revenues from fiscal 2018 (which ended in February 2019) over the following five years. It achieved all of those goals ahead of schedule, even as it temporarily closed some of its stores during the pandemic. That success prompted Lululemon to launch a new "Power of Three x2" plan in 2022, which set the same goals for doubling its men's revenues and quadrupling its international revenues from fiscal 2021 to fiscal 2026. It expected that new plan to nearly double its annual revenue from $6.3 billion in fiscal 2021 to $12.5 billion in fiscal 2026. But over the past three years, its top-line growth decelerated. Its sales of women's apparel in North America slowed down as it grappled with weak consumer spending and tougher competition from Costco's (NASDAQ: COST) Kirkland apparel, Amazon's (NASDAQ: AMZN) private label apparel, and smaller brands like Alo Yoga, Vuori, and Gymshark. Metric FY 2022 FY 2023 FY 2024 Total Revenue $8.1 billion $9.6 billion $10.6 billion Revenue Growth 30% 19% 10% Same-store sales Growth 16% 13% 4% Data source: Lululemon. FY = fiscal year. Lululemon's overseas expansion and new products (including Glow Up, Daydrift, and BeCalm) couldn't offset its soft sales of women's apparel in the U.S. market. To make matters worse, its chief product officer Sun Choe, who had held that key position since 2018, abruptly resigned last year. All of those challenges eroded Lululemon's pricing power, so it relied more heavily on markdowns to drive its revenue growth. It also absorbed the higher costs from inflation and overseas tariffs instead of passing those expenses onto its consumers. Despite that pressure, its gross margin still expanded from 55.4% in fiscal 2022 to 59.2% in fiscal 2024 as it reduced its freight and input costs, reined in its markdowns, and prioritized sales of higher-margin products in higher-margin markets. What will happen to Lululemon over the next three years? During Lululemon's latest conference call for the first quarter of 2025, CEO Calvin McDonald said he was "definitely not happy" with the brand's performance in the U.S. -- and that its consumers remain "cautious" and "discerning" in this choppy macro environment. Nevertheless, McDonald reaffirmed the company's commitment to its "Power of Three x2" targets. Therefore, investors can still expect Lululemon to generate at least $12.5 billion in revenue in fiscal 2026 -- but that would only represent a compound annual growth rate of 8.6% from fiscal 2024. Analysts are less optimistic. They expect its revenue to only grow 6% to $11.2 billion in fiscal 2025 (which ends in February 2026), 7% to $12.0 billion in fiscal 2026, and 6% to $12.7 billion in fiscal 2027. Its EPS is expected to stay nearly flat in fiscal 2025, rise 6% in fiscal 2026, and grow 4% in fiscal 2027. We should take those longer-term estimates with a grain of salt, but they suggest the company will keep struggling in the saturated North American market and rely more heavily on its overseas growth. It also probably won't launch another "Power of Three" growth plan in the future. From a growth stock to a value stock Lululemon's stock looks cheap at just 15 times this year's earnings, but it deserves that lower valuation because its core growth engine is cooling off. Its downside potential might be limited, but it won't revisit its all-time highs anytime soon. For now, the party is over for Lululemon -- but it could eventually find fresh ways to revive its brand. Should you buy stock in Lululemon Athletica Inc. right now? Before you buy stock in Lululemon Athletica Inc., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Lululemon Athletica Inc. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,075,791!* Now, it's worth noting Stock Advisor's total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Lululemon Athletica Inc. The Motley Fool has a disclosure policy. Is the Party Over for Lululemon Stock? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
