What’s Crushing Lululemon’s (LULU) Stock

Lululemon shares (LULU) are down almost 16% at the start of trading Thursday after the high-end yoga apparel maker lowered full year guidance and reported a drop in profit.

The Vancouver-based firm now sees 2014 diluted EPS to be between $1.50 and $1.55, or $1.71 to $1.76 normalized for the one-time tax adjustment related to the planned repatriation, on full-year revenue of $1.77 billion to $1.80 billion. That compares with earlier estimate revenues of $1.77 billion to $1.82 billion, and a net income between $1.80 to $1.90 per share. Decreasing earnings estimates is generally a negative sign as it suggests the Street believes future revenue to be weaker than previously anticipated.

Lululemon reported FY 2014 first-quarter earnings of $18.98-million, or $0.13 a share, from $47.28 million, or $0.32 a share a year earlier. For its current quarter, the company said it expects 2Q net revenue in the range of $375 million to $380 million and a comparable-sales decline in the low to mid-single digits on a constant-dollar basis.

Same-store sales climbed 1% while e-commerce sales jumped 25%. Bricks and mortar same-store sales however, fell 4%.

Lululemon also announced today that Chief Financial Officer John Currie plans to retire by the end of the fiscal year. The firm also announced that its board of directors has approved a stock repurchase program to buy back up to $450 million of its common shares.

LULU closed at $44.33 on Wednesday and is currently trading down $6.96, or 15.50 percent, at $37.57. The ticker is down 36% year to date.

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