Lululemon Athletica Inc (NASDAQ:LULU), the fitness clothing retailer, is trading more than 12% lower in the premarket after its guidance came in lower than Wall Street estimates.
Looking forward, the group said it expects sales of between US$10.7 and US$10.8 billion, lower than market estimates of US$10.9 billion.
Earnings per share guidance came in slightly better, with a range of US$14 to US$14.20 keeping in line with Wall Street forecasts of US$14.13.
In the upcoming quarter, revenue is expected to grow by between 9% and 10% to as much as US$2.2 billion, but analysts had been expecting a 12.5% jump to US$2.25 billion.
Analysts also expected earnings per share to be at US$2.55 during the period, but management believes it is more likely to come in at between US$2.35 and US$2.40.
During its fourth quarter, revenues rose around 16% year-on-year to US$3.21 billion, outpacing the market’s consensus of US$3.19 billion.
Earnings per share also beat market guidance, lifting to US$5.29 compared to predictions of US$5, and rising from last year’s US$0.94.
“As you’ve heard from others in our industry, there has been a shift in the U.S. consumer behaviour of late and we’re navigating what has been a slower start to the year in this market,” CEO Calvin McDonald said.
“We view this as an opportunity to keep playing offense as we lean into investments that will continue our growth trajectory. Outside the U.S., our business remains strong, and all our international markets in Canada.”