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Bloomberg
Lululemon Athletica Inc. plummeted as much as 18 percent in late trading after the yogawear company’s forecast missed estimates, renewing concern that demand for athletic gear is wavering.
The company expects earnings of $2.26 to $2.36 a share this year, well below the $2.56 projected by analysts. Its revenue forecast also came in light of predictions.
Lululemon’s woes extend a punishing year for athletic brands. Nike Inc.’s shares suffered their own rout last week after sales missed estimates, hurt by pressure from Adidas AG and Under Armour Inc. Dick’s Sporting Goods Inc., meanwhile, saw its stock tumble as well after giving a weak outlook earlier this month.
Gander Mountain Co., a chain of hunting and fishing shops, and Performance Sports Group Ltd., which sells skates, bats and other equipment, both have filed for bankruptcy in recent months. Performance won court approval in February to sell almost all its assets, including its Bauer hockey and Easton baseball divisions.
At Lululemon, revenue is expected to be $2.55 billion to $2.6 billion this year. Analysts had estimated $2.62 billion. That outlook disappointed investors after a fairly strong holiday season. Same-store sales grew 7 percent in the fourth quarter, better than the 5.3 percent average estimate compiled by Consensus Metrix.
Sales on that basis will be down in low single digits during first quarter. The company expects them to grow in the low single digits over the full year.
Fourth-quarter earnings came in at $1 a share. Analysts had projected $1.01.
The first-quarter slowdown hit e-commerce the hardest, Potdevin said on a conference call. Apparel wasn’t colorful enough or marketed well online, contributing to the sluggish sales, he said.