Lululemon Tumbles After Revenue Miss, Lower Guidance

Canadian yoga wear retailer Lululemon Athletica Inc LULU.O reported comparable sales growth that fell short of analyst estimates, sending shares down almost 9 percent on Thursday even as earnings were in line with expectations. Analysts expected sales of $541.8 million and EPS of 44 cents.

Second-quarter sales at stores open at least a year rose 4 percent, excluding the impact of exchange rate changes, or 5 percent including direct to consumer or online sales. During the same quarter previous year, the firm posted $0.34 earnings per share.

Lululemon said it expects net revenue to be in the range of US$535 million to US$545 million for the third quarter based on total comparable constant dollar sales in the mid-single digits, and earnings per share of US42 cents to US44 cents. The apparel retailer reported $0.38 earnings per share (EPS) for the quarter, meeting the Thomson Reuters’ consensus estimate of $0.38. The stock is now down 6.59 on 1.4 million shares.

The company helped bring pricey women’s yoga trousers into the fashion mainstream before expanding into running and other sports. The Company offers a line of apparel and accessories for women, men and female youth.

It competes with Nike Inc NKE.N and Under Armour Inc UA.N , as well as mainstream clothing retailers from Gap Inc GPS.N to Nordstrom JWN.N . The consensus estimates called for EPS of $0.38 on revenues of $515.47 million.

Shares of Lululemon, up 22% over the past year, fell 8.2% to $70.45 in after-hours trading.

The results matched Wall Street expectations. The yoga gear maker reported adjusted diluted earnings per share (EPS) of $0.38 on revenues of $514.5 million, compared with EPS of $0.34 on revenues of $453 million in the same period a year ago.

The company’s second-quarter EPS guidance is below expectations and that will weigh on the shares in Wednesday’s trading.