Lululemon shares plunge as the company reports disappointing second-quarter results and cuts full-year revenue guidance.
Lululemon shares fell between 15% and 20% following the company's report of a 4% decline in revenue and a 9% decrease in comparable sales for the second fiscal quarter. The company reported net income of $329.2 million, or $2.92 per share, which was lower than the $370.9 million, or $3.10 per share, reported the previous year. Interim co-CEO Meghan Frank stated that the company experienced a greater-than-expected slowdown in core categories, including leggings, and noted that social media commentary affected performance. The company reported a gross profit decrease of 1% to $1.5 billion, while gross margins grew 5.6% due to a tariff refund of $134.5 million. For the full year, Lululemon now expects net revenue to be between $10.35 billion and $10.5 billion, a 5% to 7% decline from the previous year. This revised guidance reflects a lower earnings per share estimate of $9.48 to $9.73, down from the previous range of $10.95 to $11.15. Heidi O'Neill is scheduled to take over as the company's new CEO next week.
Sources
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Lululemon made a really stupid decision this year that explains why its stock is getting crushed
Yahoo Finance
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Lululemon sinks after cutting forecast as revenue declines
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Lululemon stock plunges 20% on disappointing earnings and outlook
CNBC