.August 22, 2024 11:37 AM

Lululemon Athletica is set to lower its full-year guidance due to recent challenges and increased competition, according to Citi analysts. The company will report its second-quarter earnings on August 29, with EPS expected to meet consensus estimates. Focus will be on the updated outlook for the rest of the year, as concerns grow over internal talent challenges and competition impacting long-term performance.

The decision to pull the Breezethrough legging launch may negatively impact Lululemon’s second-half sales and margins. Investors are anticipating a reduction in full-year 2024 guidance, with Citi already adjusting its EPS forecast to $13.24, below the current guidance range of $14.27 to $14.47.

Citi predicts Lululemon will revise its fiscal 2024 sales growth forecast to the high single digits from the previously anticipated 11-12%, reflecting weaker global comparable sales. Management may also reduce SG&A expenses to align with a slower sales trajectory.