Lululemon planned to start 2014 with a new CEO and flat comparable store sales for the fourth quarter. Despite being on track to hit its numbers, however, a significant dip in traffic and sales in January has prompted the company to cut its fourth quarter forecast.
The company now anticipates that net revenue in the fourth quarter will be in the range of $513 million to $518 million based on comparable-store sales in the negative low-to-mid single digits on a constant-dollar basis. The company's previous guidance of net revenue for the quarter was in the range of $535 million to $540 million based on flat comparable-store sales on a constant-dollar basis. The company also now expects diluted earnings per share will be in the range of $0.71 to $0.73 for the quarter. The previous EPS guidance for the fourth quarter was a range of $0.78 to $0.80. EPS guidance continues to assume 146.0 million diluted weighted-average shares outstanding and a 30.0% tax rate.
"As we end 2013, we are starting to see the results of the significant investments we made throughout this past year to strengthen and enhance our back-of-house product operations structure,” said CFO John Currie. “While we realize that it will require continued investment and time to get to best-in-class status, with our new leadership in place we are very focused on building on this stronger foundation to execute our long-term growth strategies."
Management will be meeting with analysts and investors and presenting at the ICR XChange Conference in Orlando, Fla., this week.