lululemon athletica (LULU) shares plunge despite earnings, revenue beat

December 8, 2022 4:20 PM EST

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lululemon athletica (NASDAQ: LULU) shares plummeted in extended trading Thursday after the company topped third-quarter earnings and revenue expectations.

Lululemon shares are down more than 11% at the time of writing after closing the regular session up 0.87%.

The athletic apparel business reported earnings of $2 per share on revenue of $1.9 billion, which rose 28% year-over-year. Analysts expected earnings of $1.96 on revenue of $1.81 billion.

Direct-to-consumer net revenue represented 41% of total net revenue compared to 40% for the third quarter of 2021, while total comparable sales increased 22%, or 25% on a constant dollar basis.

Lululemon's inventories at the end of the third quarter increased 85% to $1.7 billion compared to $0.9 billion at the end of the third quarter of 2021.

"In the third quarter, we continued to deliver strong and balanced results across the business, demonstrating the significant potential for our brand. Our ongoing momentum is a testament to our innovative products, deep community relationships, and the hard work and dedication of our talented teams around the world," commented Calvin McDonald, Chief Executive Officer of Lululemon.

However, Lululemon's guidance was at the lower end of expectations.

Lululemon Athletica sees Q4 EPS between $4.20 and $4.30, versus the consensus of $4.30, with revenue for the period from $2.605 billion to $2.655 billion, versus the consensus of $2.65 billion.

"We are pleased with our early holiday season performance and look forward to all that's ahead for lululemon as we continue to deliver on our Power of Three ×2 growth plan," McDonald added.

By Sam Boughedda

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