Canadian yogawear retailer Lululemon Athletica on Thursday reported its fiscal fourth-quarter earnings better than expected. However, its weaker than expected outlook sent the company’s shares dropping five percent in the early trade.
Lululemon said that it has planned acceleration of its investments in the innovation to drive sustainable growth globally.
In January, the retailer has warned that the margins would trough this year as it continues investing more in the improvement of the quality as well as solving the issues related to supply-chain.
The Vancouver-based firm made the forecast earnings of 31 to 33 cents per share for its current quarter on the net revenues of USD 413 million to USD 418 million.
The market analysts, on average, expected a profit of 39 cents per share on revenue of USD 442 million, as per a survey.
It also projected USD 1.85 to USD 1.90 per share in fiscal full year earnings, on revenues of USD 1.97 billion to USD 2.02 billion. On that basis, the market analysts had projected earnings of USD 2.06 on sales of USD 2.05 billion.
The company expected its total comparable sales, which includes online and same-store sales, to rise in the “low single digits” during the first quarter and increase in the “mid single digits” over the course of its fiscal year ending early next year.
Laurent Potdevin, the company’s Chief Executive, said in a statement, “Our solid performance in the fourth quarter builds on the momentum that began in the third quarter and reflects improved traffic and a strong guest response.”
The company’s shares tumbled USD 2.96 to USD 58 in trading on the outlook ahead of the morning bell in New York on Thursday.
According to Lululemon, the net profit of the company for the fourth quarter that ended on February 1 increased to USD 10.9 million, or 78 cents a share, from USD 109.7 million, or 75 cents a share, a year earlier.
The retailer’s total comparable sales increased 8 percent and its net revenue surged 16 percent to USD 602.5 million.