Several major U.S. retailers, including Lululemon, Under Armour, BJ’s Wholesale Club, and Dollar General, have announced plans to reduce the number of products they offer. The companies detailed these strategies, known as stock keeping unit (SKU) rationalization, during recent earnings calls, citing goals of improving inventory management, operational efficiency, and profitability.
The announcements outline specific reduction targets across different retail sectors. In a September earnings call, Lululemon reported it had cut its North American SKUs by 15%. Under Armour stated in August that it had reduced its SKUs by 25% over the past few years and planned an additional 25% reduction.
“Today, we’re managing for quality. Fewer products with greater purpose, tighter execution and a clear reason to buy,” Under Armour CEO Kevin Plank said during the company’s fiscal first-quarter earnings call.
Similarly, BJ’s Wholesale Club announced in August its plan to reduce approximately 20% of its SKUs. Dollar General reported in March that it had trimmed 1,500 SKUs from its stores.
These strategic shifts follow periods of financial pressure for some of the companies. According to company reports, Under Armour’s operating income was negative in fiscal years 2025 and 2026. Lululemon’s operating profit decreased by approximately $300 million from fiscal 2024 to 2025, even as its sales grew by over $500 million during the same period.
Simeon Siegel, a senior retail analyst at Guggenheim Securities, commented on the strategy of reducing product lines. He stated that for some brands, the goal of shrinking revenue is to regain pricing power. “Selling fewer options is not the same as selling fewer things,” Siegel said.
Retailers have outlined different operational benefits from the reductions. For large-format stores like BJ’s and smaller discount stores like Dollar General, the companies state the goal is to refine their offerings and better manage large inventories.
BJ’s CEO Robert Eddy explained the approach on the company’s second-quarter earnings call in August. He said that reducing overlapping choices, such as carrying fewer scents of the same body wash, directs sales to the remaining products and creates shelf space for new product categories.
Eddy also noted a previous attempt at SKU reduction was not successful, stating, “We just cut SKUs which cut sales.” He contrasted that with the current strategy of “removing unnecessary choice.”
Dollar General CEO Todd Vasos said in an August earnings call that SKU reductions provided benefits to the company’s supply chain. He stated that eliminating certain items opened up shelf space for best-selling products. “Being more productive there means getting product to the shelf faster and being there for the consumer with the right amount of items,” Vasos said. He added that the company would continue to review its product assortment.
