Lululemon cuts guidance, misses sales estimates after botched product launch

Lululemon lowered its guidance and posted its first revenue miss in more than two years on Thursday after it botched a highly anticipated product launch and growth slowed in the Americas. 

The company now expects full-year net revenue to be between $10.38 and $10.48 billion, down from a previous range of between $10.7 billion and $10.8 billion. Lululemon anticipates earnings per share will be in a range of $13.95 to $14.15, down from previous guidance of $14.27 to $14.47.

Here's how company did in its fiscal second quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Shares rose more than 2% in extended trading after initially falling.

The company's reported net income for the three-month period that ended July 28 was $393 million, or $3.15 per share, compared with $342 million, or $2.68 per share, a year earlier. 

Sales rose to $2.37 billion, up about 7% from $2.21 billion a year earlier. Beyond total sales, Lululemon also missed expectations on comparable sales, which grew 2%, well behind estimates of 5.9%, according to StreetAccount. Comparable sales in the Americas fell 3%.

The trend doesn't appear poised to improve in the current quarter.Lululemon said it expects sales to grow 6% to 7%, worse than the 9.2% growth that analysts had expected, according to LSEG.

However, Lululemon's profit guidance is roughly in line with what Wall Street anticipated. The company said it expects third-quarter earnings per share to be between $2.68 and $2.73, compared to estimates of $2.70, according to LSEG.

During the quarter, Lululemon pulled its Breezethrough leggings, launched in early July, after it received a wave of complaints about the product's unflattering fit.