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.
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