NEW YORK, United States — Lululemon Athletica Inc., the yogawear retailer searching for a new chief executive officer, cut its full-year profit and revenue amid as increased competition. The shares declined in early trading.
Earnings per share will be as much as $1.97, reduced from a previous projection of $2.01, the Vancouver-based company said today in a statement. Analysts predict $1.99, the average of 29 estimates compiled by Bloomberg.
Chief Executive Officer Christine Day, who said in June that she’ll leave the company when a replacement is found, has been scrambling to get the retailer’s black Luon yoga pants back on shelves after recalling shipments about two months earlier for being too sheer. While Lululemon resumed selling the pants in June, retailers including Gap Inc. and Macy’s Inc. are boosting their assortments of rival products.
“The longer-term outlook for sales growth and margins continues to be clouded by competitor entry,” John Zolidis, a New York-based analyst at Buckingham Research, wrote in a note to clients yesterday. “Many of the competitors expanding assortments or opening stores in the space have significantly greater financial resources, larger store bases or better known brand names.”
He rates the shares underperform, the equivalent of a sell.
Lululemon fell 10 percent to $61.97 at 7:22 a.m. in New York. The company’s shares declined 9.5 percent this year through the close of regular trading yesterday.
By Lindsey Rupp; Editors: Robin Ajello, Kevin Orland, James Callan