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TORONTO (Reuters) - Lululemon Athletica Inc's LLL.TO (LULU.O) quarterly profit rose but sales of its signature yoga wear slightly missed analyst expectations, and the retailer's shares dropped 16 percent.
The chain - one of the rare Canadian retailers that has enjoyed success in the U.S. market - said on Thursday revenue rose 31 percent to $230.2 million in its third quarter ended October 30. Analysts on average had forecast $235.7 million, according to Thomson Reuters I/B/E/S.
Sales at established stores rose 16 percent. In the previous quarter, same-store sales rose 20 percent, and the company forecast a third-quarter slowdown in growth to the low to mid-teens in percentage terms.
Even as it slightly topped its third-quarter outlook, on Thursday, the company made the same forecast for the fourth quarter.
"Lulu remains an attractive growth story, in our view; however, today's numbers likely won't be enough to keep the stock going at its current multiple," Nomura analyst Paul Lejuez wrote in a research note.
The Vancouver-based retailer's profit rose to $38.8 million, or 27 cents a share, from $25.7 million, or 18 cents, a year earlier. Analysts were expecting earnings of 25 cents.
The company forecast earnings between 40 and 42 cents in the fourth quarter, and revenue between $327 million and $332 million.
The stock was down 16 percent at C$42.63 in early trading on Thursday on the Toronto Stock Exchange.
Reporting by Allison Martell in Toronto and Aftab Ahmed in Bangalore; Editing by Frank McGurty