Lululemon slides as outlook cut, CEO transition adds to competitive worries
LULU•Shares fall after another forecast cut
Shares of Lululemon Athletica LULU.O fell nearly 18% to $99.88 premarket after the athletic wear maker on Thursday slashed its full-year forecasts again, underscoring that incoming CEO Heidi O'Neill has her work cut out — to win back shoppers from newer rivals by revamping the athleisure brand's product line.
Co reported Q2 revenue of $2.42 bln. Analysts on average expected $2.46 bln, according to data compiled by LSEG.
Brokerages warn of traffic weakness and elevated costs
Piper Sandler said, "we are surprised that weakness in traffic and conversion is similar in both ecomm and stores, despite ecomm still being more promotional."
The brokerage added that, while Heidi O'Neill starts next week, international unwind is still ahead, while fixed cost structure is elevated.
Following the results, at least eleven brokerages cut PT on the stock, with Piper Sandler setting the Street-low target of $80, according to LSEG data.
As of the last close, the company is down about 41% this year.
