Lululemon Tightens Forecast; Shares Plunge
Lululemon Athletica said its first-quarter profit more than doubled as it sold more yoga-inspired sportswear, but its shares plummeted in extended trading as the company lowered its profit forecast slightly for the rest of the year.
Lululemon said its profit for the 13-week period, ended May 4, rose to $8.48 million, or 12 cents a share, from $3.54 million, or 5 cents a share, in the first quarter last year.
Income from operations rose 72 percent to $11.7 million from $6.8 million while revenue climbed 75 percent to $78.2 million.
Analysts, on average, had expected earnings per share before exceptional items of 12 cents on revenue of $72.1 million.
The Vancouver-based company made headlines last year when it was ordered by a Canadian government agency to remove tags that touted therapeutic benefits from fabric containing seaweed after a New York Times report pointed to lab tests that disputed the claims.
Same-store sales rose 28 percent. Adjusted to exclude the impact of a robust Canadian dollar, they gained 15 percent.
The retailer warned it had lowered its profit expectations for the fiscal year. It now expects to post an annual profit of between 68 cents and 71 cents per share, down from its earlier forecast of 70 to 72 cents.
Shares of the company , which rose 0.72 percent to $32.22 Monday, were down 10 percent after markets closed.
Lululemon said in a release it lowered the guidance because of "incremental hires and strategic initiatives."
However it raised its annual revenue forecast to between $380 million and $385 million, from a range of $370 million to $375 million, due to strong sales at new stores.
Christine Day, an insider who was named president and chief operating officer in April, will replace current Chief Executive Bob Meers when he retires this month.
Lululemon stock, which went public last year amid much fanfare, is down about 45 percent from the high of C$58.77 reached last October. A sluggish U.S. economy and a steep spike in the price of oil have raised worries over the outlook for consumer spending, particularly among high-end retailers.