CANADA: Lululemon cuts outlook despite Q3 profit growth
- Q3 profit up 15.2% to $66.1m
- Revenue grows 20% to $379.9m
- Company lowers full-year sales guidance
Lululemon Athletica has blamed macro and execution issues for cutting its full-year sales guidance, despite recording a 15.2% increase in profit during the third quarter.
The Canadian sportswear brand today (12 December) said net profit reached US$66.1m for the 13 weeks to 3 November, up on $57.4m in the same period of last year.
Revenue increased 20% to $379.9m from $316.5m in the prior year, while comparable stores sales were up 5% on a constant dollar basis. Direct-to-consumer revenue jumped 37% to $62m.
Commenting on the company's performance, outgoing CEO Christine Day said: "We are proud of our third quarter results, with sales in line with our expectation and earnings ahead of our guidance and rebounding to a double digit growth rate.
"This so far has been a year of challenges, learning, and growth for Lululemon, and while our outlook for the fourth quarter is being impacted by both macro and execution issues, I believe that the investments we are making in the business combined with the team in place create a strong platform for growth in the years ahead."
Year-to-date net profit rose 4.8% to $169.9m from $162.1m in the previous year, while sales reached $1.07bn, up 20.9% on $884.9m last year.
The company expects full-year revenue to range from $1.61-$1.61bn, compared to its earlier guidance of $1.63-$1.64bn. For the fourth quarter, revenue is forecast to reach $535-$540m, based on flat comparable-store sales on a constant-dollar basis.
The lowered forecast comes just days after Lululemon Athletica founder and chairman Chip Wilson decided to step down as the Canadian sportswear brand appointed Laurent Potdevin as its new CEO.
Last month, Lululemon faced fresh complaints about the quality of its products, eight months after the brand was forced to pull a line of black Luon trousers from its stores after the fabric was found to be see-through.
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