Lululemon Shares Are Tanking After Management Gives Weak Guidance

Despite reporting a decent Q3, Lululemon shares are getting punished after management issued weak guidance.

The stock is down by over 10% in pre-market trading.

Lululemon reported Q3 earnings of $US0.45 per share, beating expectations fo $US0.41 per share.

During the period, comparable store sales were up 5% at the yoga apparel retailer. This compares to expectations for a 5.3% gain.

“This so far has been a year of challenges, learning, and growth for lululemon, and while our outlook for the fourth quarter is being impacted by both macro and execution issues, I believe that the investments we are making in the business combined with the team in place create a strong platform for growth in the years ahead,” said CEO Christine Day.

Guidance however, was light. Management expects to earn $US0.78 to $US0.80 per share in Q4. This range is below analysts’ expectation for $US0.84.

Comparable store sales are expected to be flat during the period.

All of this comes as competition intensifies in the yoga-apparel category.

Lululemon stumbled in recent months as customers complained about see-through pants.

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