Lululemon Athletica shares fell 13% in extended trading on Thursday after the athletic apparel retailer’s profit beat for the second quarter was eclipsed by a dour full-year guidance given weakness in its U.S. business.
The company reported earnings of $3.10 per share for the quarter ended July 28, above analysts’ expectations of $2.87, while revenue of $2.53 billion came in just below the $2.54 billion consensus estimate.
For the third quarter, Lululemon forecast earnings of $2.18 to $2.23 per share and revenue of $2.47 billion to $2.50 billion, both short of Wall Street expectations of $2.90 and $2.56 billion, respectively.
Full-year earnings are now expected in the range of $12.77 to $12.97 per share, compared with analysts’ average estimate of $14.61.
Revenue is projected between $10.85 billion and $11 billion, below the $11.2 billion forecast.
Chief Executive Calvin McDonald said international sales momentum remained strong in the quarter but noted underperformance in the U.S. market and in product execution.
“We are disappointed with our U.S. business results and aspects of our product execution,” CEO McDonald said.
“We have closely assessed the drivers of our underperformance and are continuing to take the necessary actions to strengthen our merchandise mix and accelerate our business,” he said in the company’s release.
Is LULU a bargain right now?
The fastest way to find out is with our Fair Value calculator. We use a mix of 17 proven industry valuation models for maximum accuracy.
Get the bottom line for LULU plus thousands of other stocks and find your next hidden gem with massive upside.
