Lululemon plunges

Lululemon Athletica Shares Plummet Amid Disappointing Outlook

Stock Falls 11% in Extended Trading

Lululemon Athletica, the popular yogawear brand, has seen its shares drop 11% in extended trading, following a disappointing outlook for the year ahead. The stock fell to its biggest decline in a year, as investors reacted to the company’s slower-than-expected sales in the US and its reduced revenue outlook.

Disappointing Outlook

The company expects fiscal year sales to be in the range of $11.15 billion to $11.3 billion, lower than Wall Street analysts had anticipated. The outlook for first-quarter revenue also missed expectations. This decline is a significant blow to the company, which has struggled to adapt to shifting consumer preferences and increased competition in the market.

CEO’s Strategic Plan

Chief Executive Officer Calvin McDonald is working to lift demand by expanding the product assortment and entering new categories, such as gear for sports like golf, tennis, and running. However, the company has been contending with fluctuating fashion trends, trying to adapt to shoppers who prefer looser clothes rather than the form-fitting clothes that are the brand’s hallmark.

Macroeconomic Concerns

McDonald attributed the decline in sales to macroeconomic concerns, which have kept shoppers away from stores. The company has also been dealing with supply chain costs amid an escalating trade war between President Donald Trump and countries around the world.

Overseas Business Performed Better

The overseas business has performed better, with comparable international sales rising 22% in the fourth quarter. China, in particular, is a critical growth engine for Lululemon, with revenue up 39% in the quarter. The brand became the third-largest foreign sports apparel label in the market last year, according to Morgan Stanley.

Conclusion

Lululemon Athletica’s disappointing outlook has sent its shares plummeting, as investors react to the company’s slower-than-expected sales in the US and its reduced revenue outlook. The company’s struggle to adapt to changing consumer preferences and increased competition in the market has led to a decline in its stock price.

Frequently Asked Questions

Q: What is the reason for Lululemon Athletica’s disappointing outlook?
A: The company’s slower-than-expected sales in the US and its reduced revenue outlook are the main reasons for its disappointing outlook.

Q: How did Lululemon Athletica’s stock price react to the disappointing outlook?
A: Lululemon Athletica’s stock price fell 11% in extended trading, its biggest decline in a year.

Q: What is the company’s long-term strategic plan?
A: The company’s long-term strategic plan, laid out three years ago, calls for doubling sales to $12.5 billion by 2026.