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Lululemon shares fall after company offers weak holiday quarter guidance

Individuals line as much as enter a retailer throughout Black Friday purchasing at Style Retailers of Chicago in Rosemont of Higher Chicago Space, Illinois, america, on Nov. 26, 2021.

Joel Lerner | Xinhua Information Company | Getty Photos

Lululemon on Thursday reported gross sales and revenue that topped estimates, however the firm supplied softer steering than anticipated for the fourth quarter.

Shares of the corporate fell greater than 7% after hours.

This is what the corporate reported for the three-month interval in contrast with what Wall Road was anticipating, based mostly on a survey of analysts by Refinitiv:

  • Earnings per share: $2, adjusted, vs. $1.97 anticipated
  • Income: $1.86 billion vs. $1.81 billion anticipated

The athletic attire retailer is a well-liked mall vacation spot that is recognized for its fashionable — and dear — exercise attire and loungewear. Whilst inflation hits People’ wallets and other people gown up once more, traders have wager that the model can maintain drawing consumers and getting them to spend.

Lululemon’s third-quarter web revenue rose to $255.5 million, or $2 per share, from $187.8 million, or $1.44 per share a 12 months in the past. Income rose 28% to $1.86 billion.

Its whole comparable gross sales elevated by 22%. The intently watched metric, additionally referred to as same-store gross sales, consists of gross sales from shops which were open repeatedly for at the very least 12 months, with out short-term closures or renovations. Analysts anticipated a 19% enhance, in line with Road Account.

CEO Calvin McDonald stated on an earnings name that the corporate had a robust begin to the vacation season. He stated Black Friday was the largest day in its historical past for gross sales and retailer visitors. However he added, “We additionally acknowledge that the exterior setting stays difficult with a number of high-volume weeks nonetheless in entrance of us.”

The corporate’s steering for the fourth quarter got here in weaker than hoped. Lululemon stated Thursday it expects fourth quarter per-share earnings of $4.20 to $4.30, in comparison with estimates of $4.30. It additionally sees income of between $2.605 billion to $2.655 billion, versus a projected $2.649 billion.

For the complete 12 months, the corporate stated it sees income of $7.944 billion to $7.994 billion, up from its earlier forecast of between $7.865 billion and $7.940 billion. It additionally raised its adjusted earnings per share outlook to a spread of $9.87 to $9.97, from final quarter’s steering of $9.75 to $9.90.

Shares of the corporate are down greater than 4% to this point this 12 months. The inventory has outperformed the S&P 500 Index, which is down about 17% throughout the identical interval. It closed Thursday at $374.51, bringing the market cap to $47.75 billion.

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