Lululemon Under Investigation

According to reports from The Wall Street Journal and other media outlets, on the 13th local time, the Office of the Attorney General of Texas announced it has launched an investigation into Lululemon Athletica Inc. to determine whether the company misled consumers regarding product safety, quality, and health impacts, and will examine whether its athletic apparel contains "forever chemicals." As of the close of trading on the 14th local time, Lululemon's stock price on the U.S. market fell by 1.21%.

On the 13th, the Office of the Attorney General of Texas announced it is investigating whether Lululemon's athletic apparel contains per- and polyfluoroalkyl substances (PFAS), known as "forever chemicals," and will review Lululemon's testing procedures, restricted chemical lists, and supply chain management processes in accordance with the state's safety standards.

"Perfluoroalkyl and polyfluoroalkyl substances" are a class of man-made chemicals widely used in waterproof clothing, food packaging, cosmetics, and other products. These substances are difficult to naturally degrade and can accumulate in the environment and the human body, hence they are known as "forever chemicals."

Texas prosecutors stated that recent studies may heighten consumer concerns, including potential links between certain synthetic materials in clothing and health risks such as endocrine disruption and cancer. Given Lululemon's marketing strategy, health-conscious customers would not expect such substances to be present in its products.

In response, a Lululemon spokesperson stated that the company ceased using per- and polyfluoroalkyl substances (PFAS) as of January 2024. Previously, these substances were used only in limited quantities in certain water-resistant products, and the company is currently fully cooperating with the Texas attorney general's investigation.

Data shows that Lululemon's recent performance has been under continuous pressure. For the latest fiscal quarter ending February 1st, net revenue in its largest market, the Americas, decreased by 4% year-on-year. As of the market close on the 14th, the company's stock price on the US stock market has cumulatively fallen by more than 20% since the beginning of the year.