Lululemon Shares Sink 18% After Hours on Weak Results and Guidance Cut
Key Takeaways
- •Lululemon shares fell 18% in extended trading after quarterly results missed expectations and guidance was reduced.
- •Interim CEO Meghan Frank cited negative social media commentary and a sharper-than-expected slowdown in core categories like leggings.
- •The outlook reduction is the company's second guidance cut this year and comes amid a leadership transition under an interim CEO.
- •Lululemon faces intensifying athleisure competition from fast-growing rivals Alo Yoga and Vuori.
- •The company now expects full-year revenue of $10.35–10.5 billion, a 5–7% decline, versus prior guidance of $11–11.15 billion.
Lululemon Athletica's shares fell 18% in extended trading on Thursday after the company reported quarterly results that missed expectations and cut its outlook for both the current quarter and the full year.
Interim CEO Meghan Frank attributed the poor quarterly results to "negative commentary" on social media, which she said had impacted the company's performance. Frank also cited a "greater-than-expected" slowdown in some of Lululemon's core product categories, such as leggings.
The guidance cut marks the second such reduction this year, having already cut its outlook in the first quarter, and comes as the company navigates a leadership transition while operating under an interim CEO. Lululemon has also faced intensifying competition in the athleisure segment in recent years from rapidly growing rivals such as Alo Yoga and Vuori, which have courted the same premium activewear customer base.
The company now expects revenue between $10.35 billion and $10.5 billion, which would represent a decline of 5% to 7% from the year-ago period. Previously, Lululemon had guided for full-year revenue of $11 billion to $11.15 billion.
Source: CNBC-TV18
