Lululemon shares roll over after weak guidanceJune 7, 2012: 12:41 PM ET
Is the desire for pricey yoga pants dying?
Shares of Lululemon (LULU) sank nearly 9% Thursday after the yoga apparel retailer said it expects sales to slow during the current quarter.
The Vancouver-based company expects same-store sales, a key measure of performance for retailers, to rise "in the low double digits" during the three-month period ending July 31. In comparison, same-store sales jumped 25% during the first quarter.
Due to the sales pullback, Lululemon issued a weaker-than-expected overall profit and revenue outlook for the second fiscal quarter. The company expects to earn between 28 and 30 cents per share during the quarter on revenue between $273 million and $278 million. Analysts were looking for earnings of 33 cents per share on sales of $290 million, according to Thomson Reuters.
Lululemon also delivered an underwhelming outlook for the full fiscal year.
"I think Lululemon has been raising its prices too much, and consumers are starting to show resistance," said Brian Sozzi, chief equity analyst at NBG Productions.
Despite Thursday's downward dog, Lululemon's stock is up almost 37% in 2012.