Lululemon Athletica Inc.'s shares fell sharply Thursday, despite a 40 percent jump in first-quarter net income, as the fast-growing athletic clothing company offered a disappointing outlook.
There have been growing worries about a pullback in shopping by wealthy U.S. consumers who can afford $80 yoga pants, for example, underscored by a dim outlook by jewelry seller Tiffany & Co. last month. Lower spending by affluent consumers would hurt Lululemon's business.
The company said profit in the three months through April 29 rose to $46.6 million, or 32 cents per share, from $33.4 million, or 23 cents per share, a year ago.
Analysts polled by FactSet expected, on average, profit of 30 cents per share.
Revenue rose 53 percent to $285.7 million from $186.8 million as shoppers' demand for the company's spring styles soared in its stores and on its website. Lululemon has 180 stores, mostly in the U.S. and Canada, up from 142 a year ago.
Analysts expected revenue of $274 million.
Revenue in stores open at least a year rose 25 percent when stripping out the effect of changing currency values — an important measure because it includes only established stores, not newly opened stores whose sales can skew growth patterns. Online sales nearly tripled, becoming 13.5 percent of total revenue from 7.4 percent a year ago.
But Lululemon's forecast alarmed investors. The company, based in Canada, predicts earnings of 28 cents to 30 cents per share on revenue of $273 million to $278 million in the current quarter. Analysts expected profit of 33 cents per share on revenue of $289.2 million.
The forecast for the full year, which ends in January 2013, also fell short. Lululemon expects earnings per share of $1.55 to $1.60 on revenue of $1.32 billion to $1.34 billion, while analysts are forecasting profit of $1.63 per share on revenue of $1.35 billion.
Shares fell $6.18, or nearly 9 percent, to close at $63.84. The stock is up significantly since this time last year when it traded at $41.54, but gains have slowed in the past few months.