logo image

Lululemon Disappoints Wall Street, But Shows Signs of Recovery

Wall Street might not be happy, but embattled yoga-apparel retailer Lululemon is showing signs that its prospects are improving after a rocky few years.

Lululemon said its fiscal second-quarter profit fell to $48 million from $49 million in the second quarter last year, though that was largely in-line with what Wall Street analysts had expected. Net revenue increased 16 percent to $453 million, up from $391 million in the same period a year earlier, while same-store sales increased 6 percent.

Related: 

Need essay sample on "Lululemon Disappoints Wall Street, But Shows Signs of Recovery"? We will write a custom essay sample specifically for you for only $13.90/page

Click to see the full text

The company also raised its full-year outlook, predicting net revenue in the range of $2.025 billion to $2.055 billion, up from its guidance of $2 billion to $2.05 billion last quarter.

"We exceeded our revenue targets for the past quarter, supported by strong performance from both our store and ecommerce channels," Lululemon CEO Laurent Potdevin said in a statement. 

If Wall Street had a complaint, it seemed to be with profitability. Margins slipped in the quarter to 46.8 percent from 50.5 percent in the second quarter of last year. Shares of Lululemon in midday trading had fallen by more than 12 percent.

Despite Wall Street's reaction, the results do show improvement for a company that has had a string of operational issues in 2013 and 2014.

Related: 

During that period, under Lululemon's founder and former-chairman Chip Wilson, the company received heavy helpings of negative publicity. Most notably, Lululemon was forced to recall a line of yoga pants that some claimed you could see through. Not only did the recall , but Wilson unleashed an avalanche of consumer backlash when he suggested, in an on-air interview, that  for the company's clothing, implying that large thighs, not sheer fabric, was the real problem.

In the midst of all this, Potdevin, the former president of TOMS Shoes, was brought on as CEO.

The company credits its raised full year-outlook, in part, to the launch of new prints and the expansion of its men's line. "All men's clothing performed well, validating our goal of building a billion dollar men's business globally," Potdevin said on the earnings call. 

Related:

Can’t wait to take that assignment burden offyour shoulders?

Let us know what it is and we will show you how it can be done!
Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.
Please, specify your valid email address
We can't stand spam as much as you do
No, thanks. I prefer suffering on my own
Sorry, but copying text is forbidden on this website. If you need this or any other sample register now and get a free access to all papers, carefully proofread and edited by our experts.
Sign in / Sign up
We can't stand spam as much as you do
No, thanks. I prefer suffering on my own
Not quite the topic you need?
We would be happy to write it
Join and witness the magic
Service Open At All Times
|
Complete Buyer Protection
|
Plagiarism-Free Writing

Emily from Businessays

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy