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Lululemon shares down in holiday quarter as consumers curb spending

Click to play video: 'The Peak Daily: Rising inflation, Netflix subscriber loss, and Lululemon’s new targeting of men'
The Peak Daily: Rising inflation, Netflix subscriber loss, and Lululemon’s new targeting of men
Global News Business Reporter Anne Gaviola and host Brett Chang discuss rising costs of living in Canada, Netflix stocks taking a hit from subscriber losses and Lululemon’s targeting of men to increase overall sales. Get up-to-speed with a fun and smart breakdown of the three biggest Canadian and global business stories in less than 10 minutes on "The Peak Daily" podcast – Apr 25, 2022

Lululemon Athletica LULU.O forecast current-quarter revenue and profit below Wall Street estimates on Thursday, as shoppers curb spending on higher-priced clothing and accessories due to decades-high inflation, sending its shares down 10%.

High inflation, rising interest rates and the threat of a recession in the United States has resulted in a shift in consumer spending impacting the sales of apparel and sportswear as cash-strapped consumers focus on essentials.

Read more: Lululemon says changing COVID restrictions, staffing issues will hurt Q4 earnings

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People are restricting themselves from splurging on higher-priced products denting sales at companies like Lululemon that has been raising prices on its products to offset higher freight charges.

Lululemon, however, raised its full-year revenue and profit forecasts and beat third-quarter revenue estimates.

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The company forecast fourth-quarter revenue between $2.61 billion and $2.66 billion, compared to analysts’ estimates of $2.65 billion, according to IBES data from Refinitiv.

Lululemon sees fourth-quarter profit between $4.20 and $4.30 per share, compared to analysts’ average estimate of $4.30 per share.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Maju Samuel)

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