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.
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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.
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)
