Lululemon Athletica’s (LULU) stock is down 13% after the athletic apparel retailer issued weak forward guidance and warned that consumer spending is softening.
The disappointing outlook comes even though the Vancouver-based company beat Wall Street’s expectations for what was its fiscal fourth quarter.
Lululemon reported earnings per share (EPS) of $6.14 U.S., which topped the $5.85 U.S. consensus expectation of analysts.
Revenue in the quarter totaled $3.61 billion U.S., which was ahead of forecasts that called for $3.57 billion U.S. Sales were up 13% from a year earlier.
Full-year 2024 revenue came in at $10.59 billion U.S., up 10% from $9.62 billion U.S. recorded in 2023.
Comparable sales rose 3% year-over-year for the quarter. Comparable sales in the Americas were flat, while they increased 20% internationally.
Despite the strong print for the year-end 2024 holiday quarter, Lululemon delivered forward guidance that disappointed analysts and investors.
On the earnings call, CEO Calvin McDonald said a recent survey conducted by the company found that consumers are spending less due to economic and inflation concerns, resulting in lower traffic at Lululemon stores.
Consequently, Lululemon says it expects revenue in the current quarter to total $2.34 billion U.S. to $2.36 billion U.S. That’s below Wall Street forecasts of $2.39 billion U.S. in sales.
Full-year fiscal 2025 revenue is forecast at $11.15 billion U.S. to $11.30 billion U.S. That too was below the $11.31 billion U.S. anticipated on Wall Street.
Earnings this quarter are expected at $2.53 U.S. to $2.58 U.S. per share, below Wall Street’s expectation of $2.72 U.S.
Full-year earnings per share guidance came in at $14.95 U.S. to $15.15 U.S. a share, while analysts anticipated $15.31 U.S. in profits.
Prior to today (March 28), Lululemon’s stock had declined 12% over the last year and was trading at $341.53 U.S. per share.
