Lululemon Athletica (LULU.O) forecast current-quarter revenue and profit below Wall Street estimates on Thursday, as shoppers curb spending on higher-priced clothing and accessories due to high inflation for many decade, sending its shares down 10%.
High inflation, rising interest rates and the risk of a recession in the United States have led to a shift in consumer spending, affecting sales of clothing and sportswear as consumers are tight on cash. The side focuses on necessities.
Lululemon says changing COVID restrictions, staffing issues will affect Q4 earnings
People are limiting themselves to splurging on higher-priced products, reducing sales at companies like Lululemon that have raised the price of their products to offset higher shipping costs.
Alberta NDP says Prime Minister Danielle Smith’s rejection of federal government laid the groundwork for separation
Housekeepers beware: Your trip may end at a border crossing
However, Lululemon raised its full-year revenue and profit forecasts and beat third-quarter revenue estimates.
The company forecast fourth-quarter revenue of $2.61 billion to $2.66 billion, compared with analyst estimates of $2.65 billion, according to IBES data from Refinitiv.
Lululemon sees fourth-quarter earnings in the range of $4.2 to $4.3 per share, compared with the median analyst estimate of $4.3 per share.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Maju Samuel)