Lululemon stock falls on disappointing guidance
Lululemon Athletica (LULU) posted fourth-quarter earnings per share of $5.29 compared to a $5.00 estimate. Net revenue was $3.21 billion, about in line with the Street estimate of $3.19 billion.
However, the athletic apparel company's first quarter outlook fell short of expectations. First-quarter earnings per share are expected to be in the range of $2.35-$2.40, below estimates of $2.55. First-quarter net revenue is seen as $2.18 billion to $2.2 billion. Wall Street had been hoping for $2.26 billion.
Yahoo Finance's Josh Lipton and Julie Hyman break down the report.
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Editor's note: This article was written by Stephanie Mikulich.
Video Transcript
JOSH LIPTON: All right, let's get to Lululemon, Julie. They are reporting results. And we are seeing a drop here in the after hours. And they should initially go through the numbers.
EPS comes in at 5.29. Revenue 3.21 billion. The estimate was 3.19 billion.
I think it's the forecast here, Julie, that's causing some issues. Q1 EPS, 2.35 to 2.4. Street was closer to 2.55. And the revenue looks like a miss, 2.18 to 2.2 billion. Again, consensus was more like 2.26.
JULIE HYMAN: Yeah, I mean, Lululemon had come out and preannounced. So definitely the forecast is going to be more weighted when it comes to the reaction that we're seeing in the shares here. The company also says first quarter earnings per share will be $2.35 to $2.40.
Analysts have been looking for 2.55. So that, too, is short of what analysts have been anticipating. I'm looking at the statement here.
And that revenue growth in the first quarter is growth of 9% to 10% that the company is forecasting here. So it's still seeing growth potentially even double digit growth. But Lululemon has been going at such a pace that perhaps if there's some slowing momentum, that's something that would be disappointing to investors here.
Something else, I should note, they're coming out with 2024 forecasts as well of revenue of up to $10.8 billion and diluted earnings per share of up to $14.20. The company saying in its statement that guidance does not reflect potential future repurchases of its shares. It's not making any kind of buyback announcement today, but seems to be holding out the possibility that would happen.
JOSH LIPTON: Yeah, this stock, Julie, was already in the red so far this year heading into this print. So if you were a bull, I think you were hoping for some type of catalyst here. At least initially, in the after hours, investors don't seem like they saw it.
Lots of questions always on competition and what is a very competitive category. I think you'll have more color about the consumer, what do kind of underlying demand trends look like. And international expansion, I mean, that's another key theme for this team, specifically China.
We know the company has been seeing strong growth there. Do those trends they think continue despite what's been obviously kind of a shaky macro over there?
