Lululemon Athletica (NASDAQ:LULU) Inc shares plunged nearly 10% in New York as the sports clothing maker revealed its holiday quarter earnings will miss expectations amid increased costs and lower consumer spending.
For the three months to end-December, the company now forecasts earnings of between US$4.22 and US$4.27 per share, compared with its previous estimates of between US$4.20 and US$4.30 a share. Wall Street had expected US$4.29 a share.
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Lululemon, which will report its results on March 28, said gross margins in the fourth quarter will drop by 90 basis points to 110 basis points, compared to its previous guidance of a rise of between ten and 20 basis points.
On the plus side, Lululemon upped its revenue outlook for the quarter to between US$2.66 billion and US$2.7 billion, up from between US$2.605 billion and US$2.655 billion.
"We are pleased with our continued revenue growth and momentum in the business, as our teams navigate a dynamic macro-backdrop," said Calvin McDonald, CEO in a statement.
Shares in Lululemon fell 9.4% on the Nasdaq to US$298.61 each.
Contact the writer at giles@proactiveinvestors.com