Category: Companies / January 13, 2014 10:39 AM EST
Lululemon Athletica Inc. (NASDAQ: LULU) shares plunged 16.41 percent to $49.81 in morning trading on Monday after the retailer cut its earnings and revenue guidance for the current quarter and issued a profit warning.
"We were on track to deliver on our sales and earnings guidance through the month of December; however, since the beginning of January, we have seen traffic and sales trends decelerate meaningfully. Based on this recent performance and assuming these trends continue through the remainder of January, we are reducing our outlook for the fourth quarter," said John Currie, Lululemon's CFO. “As we end 2013, we are starting to see the results of the significant investments we made throughout this past year to strengthen and enhance our back-of-house product operations structure. While we realize that it will require continued investment and time to get to best-in-class status, with our new leadership in place we are very focused on building on this stronger foundation to execute our long-term growth strategies."
For the fourth quarter, Lululemon now expects net revenue will be in the range of $513 million to $518 million based on comparable-store sales in the negative low-to-mid single digits on a constant-dollar basis, compared to the retailer’s previous guidance of net revenue in the range of $535 million to $540 million for the fourth quarter based on flat comparable-store sales on a constant-dollar basis.
In addition, the Company now expects diluted earnings per share will be in the range of $0.71 to $0.73 for the quarter. The previous EPS guidance for the fourth quarter was a range of $0.78 to $0.80.
In separate news, General Motors Company (NYSE: GM) is “closer” to issuing a dividend, according to the automaker’s CFO Dan Ammann when he spoke to reporters at the Detroit Auto Show.
On Monday, shares of GM rose 1.42 percent to $40.60 in morning trading.
The Dow Jones industrial average gained 15.08 points or 0.09 percent, to 16,452.13. The S&P 500 added 0.67 points or 0.04 percent, to 1,843.09. The Nasdaq Composite rose 3.36 points or 0.08 percent, to 4,178.02