10 Worst Performing NASDAQ Stocks in 2024

4. Lululemon Athletica Inc. (NASDAQ:LULU)

Year to Date Gain: -42.33%

Number of Hedge Fund Holders: 45

Lululemon Athletica Inc. (NASDAQ:LULU) is turning out to be one of the worst-performing NASDAQ stocks in 2024 amid growing concerns about its financial performance in a slowing retail environment. The company pausing the sale of its new Breezethrough collection and stating plans to make design adjustments rattled the investment community.

Investors have been dumping the stock in response to the company’s slowing growth, mainly because of challenging macroeconomic conditions. The high interest rate environment, compounded by inflation, has hurt consumer purchasing power, making it difficult for Lululemon to enjoy robust revenue growth.

Sales in Lululemon Athletica Inc. (NASDAQ:LULU) major markets and among its target demographic, women, have abruptly slowed after experiencing tremendous growth during the pandemic. Sales have slowed amid stiff competition from other clothing companies that are also selling high-end yoga and athleisure gear.

While the company delivered solid second-quarter results, with revenues increasing 7% to $2.4 billion, slow growth in core markets is taking a significant toll on its sentiments. Lululemon Athletica Inc. (NASDAQ:LULU) is seeing sluggish growth in the core markets of America, where sales were down by 3% in the second quarter.

Amid the struggles, Lululemon is still making profits. It is also in the same situation as other expensive clothing manufacturers. Given that there is no indication that the brand is having problems, the company may resume producing higher sales figures as the economy improves. As of the second quarter, 45 hedge funds have invested $1.06 billion in the company.

Middle Coast Investing stated the following regarding Lululemon Athletica Inc. (NASDAQ:LULU) in its Q2 2024 investor letter:

“I mentioned last quarter and higher above that I like buying quality stocks on sale. Lululemon Athletica Inc. (NASDAQ:LULU), the 2nd worst performer in the S&P 500 this year, qualifies. I published a full thesis on the stock before its most recent earnings, but the basics: the yoga pants and clothing company has had an amazing post pandemic run that is approaching its end. Its growth in the U.S. is slow/non-existent at the moment, but it is growing very fast in China and Europe. I think that international growth is likely to endure, and that its U.S. slowness is likely to be temporary. Lululemon shares are not ‘cheap’, but they are on sale for an average price, and I think the company will grow faster than average over the next five years. I would be wrong if Lululemon is a fad gone bust, or faces a huge post-pandemic hangover as people get used to leaving the house more. We’ll see.”