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lululemon (LULU) CEO Day: Q4 Guidance Was 'Misinterpreted'

January 16, 2013 1:43 PM EST Send to a Friend
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lululemon athletica (Nasdaq: LULU) CEO Christine Day was on CNBC this afternoon defending her companies guidance from Monday.

She said guidance was misinterpreted and that the company didn't issue guidance for next year.

lululemon still has about 2.5 weeks left in its fiscal year, so there are a lot of moving parts. The company probably won't issue guidance until the March quarter.

In terms of discounting concerns, Day noted that lululemon didn't get into that "game" during the holiday season, keeping prices high throughout.

Day acknowledged that consumers are now more savvy, buying gift cards and waiting until post-holiday discounts. She noted that it was a strong growth season for lululemon in terms of gift card sales. Heading into next holiday, Day said the company would do more "unusual and bold" things. Notably, 2013 has six fewer selling days during the holiday.

Some of the missteps that lululemon had in the quarter include POS issues leading to the company having trouble handling volume. There were also IT-related issues and plans to rollout handheld scanners/registers didn't go out in time.

CNBC asked whether lululemon expanded too fast (into international markets)? Day said that the company was "very cautious in growth" and maintains a pace of opening 30 to 35 stores per year. She noted that the company was one or two years behind in systems investments, but is rapidly implementing infrastructure.

CNBC also asked how strong e-Commerce is given that it isn't included in results? Day responded that e-Commerce accounts for roughly 15 percent of sales, versus 13 percent last year.

The apparel company said it expected fourth-quarter revs at the high-end of guidance calling for for $475 million to $480 million while EPS guidance was raised from a range of 71 cents to 73 cents up to 74 cents.

Consensus estimates were looking for revs of $489 million and EPS of 74 cents.

Shares are down 1.3 percent on the session, off of earlier lows.




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