(Updates with details, comments from analyst conference call)
By Solarina Ho
TORONTO, March 29 Canada's Lululemon Athletica
Inc on Wednesday reported fourth-quarter earnings per
share that fell shy of analysts' expectations, hurt by a
stronger-than-expected Canadian dollar, and said first-quarter
comparable sales were expected to fall.
The outlook and results sent shares of the Canadian yoga and
leisure apparel retailer falling 18.2 percent to $54.25 after
A disappointing product assortment in the first quarter
resulted in weaker online sales and fewer shoppers in stores,
executives told analysts in a conference call.
"We've clearly identified the issues: an assortment lacking
depth and color for spring," said Chief Executive Officer
"Our teams have been course-correcting issues, with early
indications reflecting positive impact on performance. We will
see more color in selected styles as early as next week."
The company said it expects first-quarter revenue between
$510 million to $515 million, based on an expected decrease in
sales in the low single digits. Earnings of 25 to 27 cents per
share is forecast for the quarter.
Executives remained bullish on full-year results, despite
the slow start in the first quarter. Its full-year revenue
forecast ranges between $2.55 billion and $2.6 billion and
full-year earnings range between $2.26 and $2.36 per share.
The Vancouver-based retailer popularized the "athleisure
wear" market, turning pricey women's yoga wear into mainstream
fashion, and spurring established apparel brands like Under
Armour Inc, Nike Inc and Gap Inc to join
the increasingly competitive market.
Lululemon's international success made it an investor
darling, but a string of quality and supply chain problems,
boardroom upheaval, and stiff competition in recent years have
dulled some of its appeal.
Potdevin said its Chinese expansion would be a key focus
this year, while Lululemon's men's line is on track to become a
$1 billion-plus business by 2020.
For the fourth quarter ended Jan. 29, net income rose to
$136.1 million, or 99 cents per share, from $117.4 million, or
85 cents per share, in the prior year. Revenue was $789.9
million, up from $704.3 million.
Analysts, on average, had expected earnings of $1.01 a share
on revenue of $783.56 million, according to Thomson Reuters
Lululemon said the negative foreign currency impact was 2
cents higher than previously estimated.
Fourth-quarter sales online and at stores open at least a
year rose 7 percent, on a constant dollar basis. That beat the
5.3 percent increase expected by analysts, according to
(Reporting by Solarina Ho; Editing by Lisa Shumaker)