Lululemon missed Wall Street’s fiscal second-quarter sales expectations and lowered its guidance Thursday after it botched a highly anticipated product launch and growth slowed in the Americas.
The company now expects full year net revenue to be between $10.38 and $10.48 billion, down from a previous range of between $10.7 billion and $10.8 billion. Lululemon anticipates earnings per share will be in a range of $13.95 to $14.15, down from previous guidance of $14.27 to $14.47.
Here’s how company did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: $3.15 vs. $2.93 expected
- Revenue: $2.37 billion vs. $2.41 billion expected
Shares dropped as much as 10% in extended trading.
The company’s reported net income for the three-month period that ended July 28 was $393 million, or $3.15 per share, compared with $342 million, or $2.68 per share, a year earlier.
Sales rose to $2.37 billion, up about 7% from $2.21 billion a year earlier. Beyond total sales, Lululemon also missed expectations on comparable sales, which grew 2%, well behind estimates of 5.9%, according to StreetAccount.
During the quarter, Lululemon pulled its Breezethrough leggings, launched in early July, after it received a wave of complaints about the product’s unflattering fit. The botched launch came after the company struggled with a number of other self-inflicted issues with its assortment, including not having the right colors and sizes that its core customers desired.
The flops have contributed to a slowdown in the company’s largest market, the Americas. During the quarter, sales grew only 1% in the region.
Sales jumped 29% in Lululemon’s international markets as the company looks to China for growth.
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