Amid the ongoing search for a new chief executive officer of the giant yogawear retailer, Lululemon Athletica Inc. (LULU), it has announced to have cut its profit forecast due to new rivals entering its market and shoppers cutting spending on clothing. The company mentioned in a statement that its shares have fell, consequently making the company to decrease the expected earnings per share to be as much as $1.97, from a previous projection of a maximum of $2.01.
According to the current Chief Executive Officer who promised in June to remain in the company until a replacement is found, Christine Day, it was alleged that the company is planning to move beyond yoga to compete with its rivals including Gap Inc. (GPS) and Macy’s Inc. (M). It was highlighted that consumers are inclining to pull back on non-essential purchases, causing retailers from Macy’s to Wal-Mart Stores Inc. to cut their profit forecasts for the year. A New York-based analyst at Oppenheimer & Co., Anna Andreeva, mentioned in an interview that “the guidance obviously disappointed” and “people are trying to figure out how much of this is macro and how much of this is company-specific.”
It was reported that Lululemon shares fell 8.1 percent to $63.40 at 8:04 a.m. in New York, while the company’s shares decreased by 9.5 percent overall through this year at the close of regular trading yesterday. In its announcement Luluemon added that full-year sales will be as much as $1.64 billion, which is another decrement of a previous projection of a maximum of $1.67 billion.
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