Lululemon Stock Dips 15% After Earnings Drop and Guidance Cut
Lululemon Athletica Inc., the popular athleisure retailer based in Vancouver, saw its stock price plunge by more than 15% in early trading following disappointing financial results and a revised outlook for the year.
Shares of the company tumbled by US$19.58 to US$102.19 shortly after the opening bell on the Nasdaq market today. The decline came in response to Lululemon’s announcement on Thursday, after the markets closed, revealing a decline in second-quarter profits, revenues, and comparable sales compared to the previous year.
The company cited customer inconsistency in response to its products, noting a particular slowdown in sales of its signature leggings. Lululemon also acknowledged the impact of recent controversies, including disputes with its founder, issues with product transparency, and criticism in international markets like China.
Despite these challenges, Lululemon is set to welcome a new chief executive, with former Nike executive Heidi O’Neill poised to take the helm next week.
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