By Neil J Kanatt, Anuja Bharat Mistry
(Reuters) -Lululemon Athletica forecast annual revenue and profit below estimates on Thursday as the lack of consumer appeal for its newer styles has been pushing customers to look for products from competitors such as Alo Yoga and Vuori.
The company’s shares fell about 11% in extended trading.
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Lululemon’s efforts to refresh its product lineup have been falling short of keeping up with rising competition from other brands, whose newer styles are more appealing to consumers.
After struggling to resonate with customers for a while, the Canada-based company has introduced products, including Define cropped jackets and Align tank tops, to bring in consumers, especially younger people, who are often searching for trendier items.
Lululemon expects its fiscal 2025 revenue to be between $11.15 billion and $11.30 billion, compared with the analysts’ estimates of $11.31 billion, according to data compiled by LSEG.
It also expects annual diluted earnings per share of $14.95 to $15.15, compared with the average analysts’ estimate of $15.30 per share.
While the company did not specify what impacts it would see from tariffs, it said in its annual report that its business could be negatively affected by them.
“Falling consumer confidence and fears surrounding tariffs are already pushing consumers to curb discretionary spending, which could weigh heavily on Lululemon’s performance this year,” eMarketer analyst Rachel Wolff said.
Comparable sales rose 3% for the quarter, missing a mean estimate of a 4% rise after coming in flat in the Americas, while in China, the company’s comparable sales rose 26% from a year ago.
“While a solid print, the Americas biz comped flat year-over-year in 4Q, as inventories are rising and the outlook for ’25 appears muted. The theme remains that growth continues to fade, making further increases in sales and EPS challenging,” Jefferies analysts said.
Lululemon posted quarterly revenue of $3.61 billion, beating estimates of $3.57 billion driven by a stronger holiday season.
It earned a profit of $6.14 per share, above the analysts’ average of $5.85 apiece.
(Reporting by Neil J Kanatt and Anuja Bharat Mistry in Bengaluru; Editing by Alan Barona)
