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Ahead of the Bell: Lululemon

NEW YORK (AP) -- Lululemon Athletica Inc. tumbled 6 percent before Tuesday's opening bell after the yoga retailer's revenue outlook fell below Wall Street expectations.

The Canadian company said late Monday that it expects to earn 74 cents per share for the quarter that ends Feb. 3. It previously projected earnings of 71 to 73 cents per share. Revenue is expected to come in at the high end of its original guidance range of $475 million to $480 million.

Analysts polled by FactSet forecast earnings of 74 cents per share on revenue of $489 million.

Janney Capital Markets analyst Adrienne Tennant backed her "Buy" rating and $80 fair value estimate for the stock. She predicted continued growth for the company, but cautioned that investors need to have realistic expectations.

"We continue to believe Lululemon remains one of the key brands that is building awareness, driving share, and selling product at full price in a sea of price competition," Tennant wrote in a note to investors.

"Lululemon remains an attractive longer term growth story. However, we do expect annual earnings growth to moderate as the company grows in size."

Sterne Agee's Sam Poser also backed his "Buy" rating, saying that investors shouldn't worry too much about the revenue guidance.

"We are more than comfortable that the long-term growth story remains intact," Poser wrote in his note. "The company also said that margins were running ahead of plan and year-end inventory would be clean; both of which do not sound like a struggling company."

Poser added that next week's investor meetings should help quell concerns and start a recovery for the stock.

Shares of Lululemon Athletica Inc. fell $4.30 to $68 in premarket trading.