Superstar stock Lululemon Athletica is down around 4% today on a weaker revenue outlook for the first quarter than analysts expected.After posting a revenue increase of 53% to $245.4 million for the fourth quarter the company said its revenue outlook for the first quarter is $175 million to $180 million, falling short of analyst hopes.
Here is why Lululemon lowered its outlook (via Reuters):
- It expects more cost pressures this year
- Huge demand during the holidays has put pressure on inventory
- It is spending more on air freight to boost stocks at stores
- It is going to have to invest more on technological and management systems to support its rapid expansion.