From CNBC: 2024-06-05 17:04:07

Lululemon’s growth in the Americas stalls with flat comparable sales and weak guidance for the current quarter. Despite beating earnings estimates, revenue was only slightly above expectations. Stock rose 10% in extended trading, with a $1 billion addition to stock buyback program. Net income was $321 million, or $2.54 per share, and sales increased to $2.21 billion.

CEO Calvin McDonald emphasized strong international market momentum but acknowledged work needed in Americas. Tepid growth attributed to narrow leggings color assortment and inventory issues. Sales in Americas up 3%, compared to 17% last year, with flat comparable sales. Total comparable sales grew 6%, below analysts’ expectations of 7%.

Lululemon’s weak guidance for next quarter expects revenue between $2.40 billion to $2.42 billion, below estimates, with earnings per share between $2.92 and $2.97, versus estimates of $3.02. Full-year guidance expects earnings per share between $14.27 and $14.47, ahead of estimates, and revenue between $10.7 billion and $10.8 billion, in line with expectations.

In a troubling stretch, Lululemon, a market leader, is facing growth concerns with a 40% stock decline YTD. Chief product officer’s resignation caused shares to fall. Denim trend poses a threat as consumers may shift from athleisure to jeans. Investors worry about Lululemon’s future prospect in the changing retail landscape.



Read more at CNBC:: Lululemon (LULU) earnings Q1 2024