Lululemon Athletica Inc (NASDAQ:LULU) saw $14 billion wiped from its value in a brutal after-hours sell-off Thursday, despite beating quarterly earnings expectations.
The reason? A cautious downgrade to its full-year profit outlook and a frank admission from trendy leggings retailer's CEO, Calvin McDonald, that US growth just isn’t cutting it.
While first-quarter revenue hit $2.37 billion, just ahead of forecasts, the company revised its full-year earnings per share down to between $14.58 and $14.78, well below previous guidance.
That, coupled with ongoing tariff worries and signs of American consumer hesitation, spooked the market.
CFO Meghan Frank hinted at modest price hikes to soften tariff blows, starting later this quarter.
But with US sales down 2% and only international markets showing momentum, the outlook remains tepid.
Despite strong margins and a decent bottom line, shares plunged 23% after the bell.
Investors appear to be asking: if this is playing offence, what does defence look like?
The stock tanked 23% to $330.78.