Shares of yoga apparel maker Lululemon (NASDAQ:LULU) dove 16% in early trade on Monday after the company cut its fourth-quarter outlook, saying it has seen a meaningful deceleration in traffic and sales.
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The Vancouver-based retailer now sees quarterly adjusted earnings in the range of 71 cents to 73 cents a share, below an earlier view of between 78 cents and 80 cents.
It forecasts sales between $513 million and $518 million, down from $535 million to $540 million previously, with same-store sales, a key growth metric, falling into the negatives.
Analysts on average are calling for stronger earnings and sales of 79 cents and $541.3 million, respectively, according to a Thomson Reuters poll.
"We were on track to deliver on our sales and earnings guidance through the month of December; however, since the beginning of January, we have seen traffic and sales trends decelerate meaningfully,” Lululemon chief financial officer John Currie said in a statement.
Shares of Lululemon fell more than 14.5% to $50.86 in early trade, pushing them down about 28% over the last 12 months.
The guidance assumes these trends continue through the end of the company’s fiscal year 2013 ending Feb. 2.
Lululemon continues to reel from last March's sheer pants debacle that led to a massive recall, forcing the retailer to invest heavily in its supply chain and to cut its full-year outlook at least twice.
In December, Lululemon named Toms Shoes president Laurent Potdevin as its new chief executive to replace long-time CEO Christine Day and said that founder Chip Wilson would step down.