Lululemon Experienced A Once Unthinkable Development In Q4

Lululemon’s financial results are out, and the numbers are mixed.

Q4 earnings came in at $US0.75 per share, which was better than the $US0.72 expected by analysts.

Revenue of $US521 million was higher than the $US515 million expected.

However, comparable store sales turned negative and fell 2%. Belus Capital’s Brian Sozzi characterised this as “a once unthinkable development.”

Management also announced guidance that fell short of expectations.

The company expects to earn $US0.31 to $US0.33 per share in Q1, which was much lower than the $US0.38 expected. This is on sales of $US377 million to $US382 million versus the expectation for $US389.6 million.

They expect comparable store sales to grow in the “low to mid-single digits,” which is actually better than the 4.2% decline forecasted by analysts.

Sozzi said these forecasts were “worrying even when considering Lululemon is not known for guiding in line in times of operational greatness.”

“2014 is an investment year with an emphasis on strengthening our foundation, reigniting our product engine, and accelerating sustainable and controlled global expansion,” said CEO Laurent Potdevin.

1Q14 earnings per share guidance is well below consensus, worrying even when considering Lululemon is not known for guiding in line in times of operational greatness.

The company will hold a conference call at 9:00 a.m. ET to discuss the results.

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