Canadian yoga wear retailer Lululemon Athletica Inc LULU.O reported comparable sales growth that fell short of analyst estimates, sending shares down almost 9 percent on Thursday even as earnings were in line with expectations. The business earned $514.52 million during the quarter, compared to the consensus estimate of $514.64 million. Sales at stores open for more than a year, a key industry metric known as same store sales, rose four per cent (five per cent in constant dollars). Revenue rose 14 percent to $514.5 million.
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On a conference call, Chief Financial Officer Stuart Haselden reminded analysts and investors that Lululemon had an online promotion in the second quarter of a year ago. Lululemon Athletica’s revenue was up 13.6% compared to the same quarter past year.
Lululemon raised its outlook for fiscal year revenue from a prior range of $2.305 to $2.345 billion to a new range of $2.325 billion to $2.350 billion. Analysts expected full-year sales of $2.343 billion and EPS of $2.15. Lululemon Athletica updated its Q3 guidance to $0.42-0.44 EPS and its FY17 guidance to $2.07-2.15 EPS.
During the second quarter, the company repurchased 200,000 shares of common stock at an average cost of $63.65 per share, and has now completed its share buyback plan.
CEO Laurent Potdevin said, “The second quarter demonstrated strong results as we delivered sales and EPS at the high-end of our guidance and saw an important inflection in our gross margin and earnings performance…” Lululemon forecast “mid-single digit” growth for the current quarter.
LULU has been the subject of a number of research reports.
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Shares dropped 8.6 percent to $70.07 in after-market trading. MKM Partners reissued a “buy” rating and set a $77.00 target price on shares of Lululemon Athletica in a research note on Wednesday, June 1st. The consensus price target before this report was $73.21, and the high target was $92.00.
