VANCOUVER – Lululemon Athletica Inc. shares fell more than 10 per cent in pre-market trading after the fashion retailer said its sales have dropped off in January and its fourth-quarter results will be lower than expected.
Lululemon’s chief financial officer, John Currie, says the company was on track to meet its targets through December but there’s been a significant drop in customer visits and sales this month.
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The Vancouver-based company says it now expects its fourth-quarter revenue and profit will be significantly lower than its previous estimate.
Its shares were down about 13 per cent at US$51.78 about an hour before the start of regular trading, but the stock had been even lower earlier in the morning.
Lululemon’s stock closed Friday at US$59.60 on the Nasdaq market.
The shares had already dropped significantly on Dec. 12, a few days after the company announced it had hired a new chief executive officer – Laurent Potdevin – and said Lululemon founder Chip Wilson would step aside as chairman of the board of directors.
Wilson ignited a public relations crisis for the company in November by suggesting to Bloomberg TV that Lululemon’s yoga pants don’t work well for some women.
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Analysts had been expecting Lululemon’s actual results to be slightly above the company’s previous guidance on revenue and earnings.
Lululemon’s new revenue range is between US$513 million and US$518 million, about $22 million lower than the previous guidance.
The company’s new estimate for diluted earnings per share is between 71 and 73 cents per share, a reduction of seven cents.
Analysts had estimated 79 cents per share of adjusted earnings, according to Thomson Reuters.
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