LULU Stock – Lululemon Stock Tumbles on Outlook

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Lululemon stock (LULU) fell nearly 13% pre-market Monday after lowering its fourth-quarter outlook below analysts’ estimated due to lower than expected sales.

Lululemon-stock-LULU-sharesThe upscale athletic retailer said it expected sales to decline by a low to mid single digit percentage rate.

Lululemon stock had previously gained some upward momentum prior to the news.

From the Associated Press:

Lululemon now foresees quarterly earnings between 71 cents and 73 cents per share on revenue in a range of $513 million to $518 million. Its prior guidance was for earnings of 78 cents to 80 cents per share on revenue of $535 million to $540 million.

Analysts polled by FactSet predict earnings of 79 cents per share on revenue of $541.2 million for the period ending Feb. 2.

In a statement the company released, Chief Financial Officer John Currie said “we were on track to deliver on our sales and earnings guidance through the month of December; since the beginning of January, we have seen traffic and sales trends decelerate meaningfully.”

This is despite heavy sales that Lululemon has promoted for the past few weeks.

Lululemon noted its less than solid recent performance, and stated that it would operate under the notion that the slowdown in sales and traffic could continue for the rest of the month.

The company and Lululemon stock had been highly expected to bounce back at the beginning of the year, after a mini scandal that saw the company’s founder — Chip Wilson — to be replaced as chairman after comments that the products didn’t work because some women were simply too large.

Laurent Potdevin, former head of Toms Shoes, was named the new Lululemon CEO on Christmas day.

Lululemon will report final Q4 results at the end of March.


Article printed from InvestorPlace Media, https://investorplace.com/2014/01/lulu-stock-lululemon-stock-shares/.

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