Lululemon shares tumble on miss, weak first-quarter outlook
By Solarina Ho
TORONTO (Reuters) - Canada's Lululemon Athletica Inc (LULU.O: Quote) on Wednesday reported fourth-quarter earnings per share that fell shy of analysts' expectations, hurt by a stronger-than-expected Canadian dollar, and said first-quarter comparable sales were expected to fall.
The outlook and results sent shares of the Canadian yoga and leisure apparel retailer falling 18.2 percent to $54.25 after markets closed.
A disappointing product assortment in the first quarter resulted in weaker online sales and fewer shoppers in stores, executives told analysts in a conference call.
"We've clearly identified the issues: an assortment lacking depth and color for spring," said Chief Executive Officer Laurent Potdevin.
"Our teams have been course-correcting issues, with early indications reflecting positive impact on performance. We will see more color in selected styles as early as next week."
The company said it expects first-quarter revenue between $510 million to $515 million, based on an expected decrease in sales in the low single digits. Earnings of 25 to 27 cents per share is forecast for the quarter.
Executives remained bullish on full-year results, despite the slow start in the first quarter. Its full-year revenue forecast ranges between $2.55 billion and $2.6 billion and full-year earnings range between $2.26 and $2.36 per share.
The Vancouver-based retailer popularized the "athleisure wear" market, turning pricey women's yoga wear into mainstream fashion, and spurring established apparel brands like Under Armour Inc (UAA.N: Quote), Nike Inc (NKE.N: Quote) and Gap Inc (GPS.N: Quote) to join the increasingly competitive market. Continued...