Lululemon dropped $3.38, or 32 percent, to $7.08 at 4 p.m. in Nasdaq Stock Market composite trading, the steepest decline since the retailer sold shares to the public in July 2007. Before today, the stock shed 78 percent of its value this year.
Sales at stores open at least a year may decline in the “low double-digits” on a percentage basis in the fourth quarter in the sluggish economy.
Blaming a declining Canadian dollar and ailing retail sector, Lululemon cut its fiscal 2008 earnings forecast to a range of 55 cents to 57 cents a share from a previous forecast of 68 cents to 71 cents.
RBC Capital Markets analyst Howard Tubin and Tal Woolley said in a note that Lululemon was expected to revise its outlook due to tough economic times, but that the company’s forecast was well below expectations and “a kick in the chakras.”
A “kick in the chakras” aahaahaaa. (We nearly died when we read that).
Well, all right lulus let’s all take a deep breath here and try not to get our groove pants in a bunch. If you haven’t noticed, times are tough! And are probably going to get tougher, which is why forecasts are looking quite ill lately. If it makes them feel better the Canucks can probably blame a big part of the depressing numbers on good old greenbacks (oddly enough, the US dollar actually strengthened recently).
Honestly, it’s not like we didn’t expect this to happen, what with the spiraling global economy – Lululemon is not invincible! Gasp, we know. If there’s anything we can count on it’s change right? But we can imagine that next goal setting meeting will be an interesting affair. 2009 could be a rough ride. “Failing to plan is planning to fail,” right Chip!
Other notable big losers in the category: Urban Outfitters and Gilden.