CANADA: Lululemon lowers Q4 earnings, sales guidance
Late last year, Lululemon faced fresh complaints about the quality of its products
Lululemon Athletica has lowered its fourth-quarter earnings and sales guidance on the back of declining traffic and revenue trends.
In a trading update today (13 January), the Canadian sportswear brand said it expects diluted earnings per share in the range of US$0.71 to $0.73 for the quarter ended 2 February. This compares to previous guidance of $0.78 to $0.80.
Sales are expected to be in the range of $513m to $518m based on comparable-store sales in the negative low-to-mid single digits. This is lower than the company's previous forecast of $535m to $540m for the quarter based on flat comparable-store sales.
"We were on track to deliver on our sales and earnings guidance through the month of December; however, since the beginning of January, we have seen traffic and sales trends decelerate meaningfully," said CFO John Currie.
Nonetheless, he added: "As we end 2013, we are starting to see the results of the significant investments we made throughout this past year to strengthen and enhance our back-of-house product operations structure. While we realize that it will require continued investment and time to get to best-in-class status, with our new leadership in place we are very focused on building on this stronger foundation to execute our long-term growth strategies."
Late last year, 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.
Lululemon Athletica, based in Canada, specialises in the design and sale of technical apparel and accessories for athletic pursuits such as yoga, running and general fitness at premium prices. The com...
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