Vancouver-based Lululemon Athletica (NASDAQ:LULU) reported net revenue of US$479.7 million for 2015’s third quarter December 9, which represents a year-over-year increase of 14% but falls short of analysts’ expectations.
Expert consensus, according to Nasdaq.com, was for net revenue of US$482 million during the quarter. For the year, the yogawear-maker downgraded its net revenue forecast from an upper range target of US$2.055 billion as reported in Q2 to US$2.040 billion.
Net income in the quarter was US$53.2 million, down almost 14% compared with the same period last year.
The company reported gross profit as a percent of net revenue of 46.9%, more than three percentage points lower than the 50.3% reported in Q2 2014, which analysts say could indicate deeper discounts and price cuts over the quarter. Meanwhile, inventory has been building up, having jumped 72% to US$357.7 million compared with last year.
Diluted earnings per share were US$0.35, down from US$0.42 in the same period last year and below the US$0.37 expected by analysts.
The company said it expects revenue in the fourth quarter—which will include all holiday sales—to increase, with a forecast between US$670 million and US$685 million and diluted earnings per share between US$0.75 and US$0.78.
As of press time, shares of Lululemon were trading at US$47.09—down more than 9.7%.
Update: as of 11:13 a.m. PST, shares had fallen more than 12% to $45.79.
