The logo of a Lululemon store on Thursday, August 22, 2024 in New York, USA.
Yuki Iwamura | Bloomberg | Getty Images
lululemon The company missed Wall Street’s fiscal second-quarter sales forecasts on Thursday and cut guidance after its much-anticipated product launch failed and growth slowed in the Americas.
The company now expects full-year net income of $1.038 to $10.48 billion, down from the previous range of $10.7 billion to $10.8 billion. Lululemon expects earnings per share to be in a range of $13.95 to $14.15, down from previous guidance of $14.27 to $14.47.
Here’s how the company performed compared to Wall Street expectations, according to a survey of analysts by LSEG (formerly Refinitiv):
- Earnings per share: $3.15 Expected to be $2.93
- income: US$2.37 billion Expected to be $2.41 billion
Shares fell 10% in after-hours trading.
The company reported net income of $393 million, or $3.15 a share, for the three-month period ended July 28, compared with $342 million, or $2.68 a share, a year earlier.
Sales increased to US$2.37 billion, an increase of approximately 7% from US$2.21 billion in the same period last year. According to data from StreetAccount, in addition to total sales, Lululemon’s comparable sales also fell short of expectations, with annual sales growing 2%, much lower than the expected 5.9%.
This quarter, Lululemon removed its Breezethrough leggings, launched in early July, after the company received a wave of complaints about the product’s ill-fitting fit. The launch failure comes after the company encountered a number of other self-inflicted problems with its product range, including not having the right colors and sizes its core customers wanted.
Those failures led to slower growth in the Americas, the company’s largest market. Sales in the region grew only 1% this quarter.
Lululemon has set its sights on China for growth, and its international market sales soared 29%.
