Lululemon Stock Drops 11% in 2025 After Weak Revenue Forecast—Watch Crucial $431 Support Level

Lululemon Athletica's shares plunged 11% in after-hours trading on Thursday after the company released a revenue forecast that disappointed investors, primarily due to softness in its Americas segment.

Highlights to Note

• The activewear giant's guidance fell short of analyst expectations, causing a significant dip in extended trading.
• CEO Calvin McDonald attributed the sluggish start to 2024 to evolving U.S. consumer habits and limited product variety impacting store traffic and conversions.
• Technical analysis suggests the stock may find support near the $431 mark, close to its 200-day moving average and an upward trendline.

The Vancouver-based retailer projects Q1 revenue between $2.175 billion and $2.20 billion, reflecting 9% to 10% growth but below the $2.25 billion analysts anticipated. Diluted earnings per share are expected between $2.35 and $2.40, under the consensus of $2.55.

For the full fiscal year, Lululemon forecasts sales of $10.7 billion to $10.8 billion, slightly under the $10.9 billion analyst estimate, with EPS guidance at $14.10, just below the $14.13 consensus.

Despite these cautious projections, the company reported strong holiday quarter results with earnings of $5.29 per share on $3.21 billion revenue, surpassing estimates of $5.00 EPS on $3.19 billion sales.

International sales surged 54%, fueled by growth in China, partially offsetting the slower 9% increase in the Americas, which lagged behind last year's 29% growth. This slowdown raises concerns about inflation's impact on discretionary spending.

CEO McDonald emphasized the shift in U.S. consumer behavior and noted that limited sizing and color options have contributed to reduced customer engagement.

Since forming a bullish golden cross in April 2023, Lululemon's stock has trended upward. However, the recent earnings-driven sell-off highlights the importance of monitoring the $431 support level near the 200-day moving average. A break below this could lead to a decline toward longer-term support around $389.

After-hours, the stock fell to $425.77, its lowest since November 2023.

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. The author holds no positions in the securities mentioned.

Discover engaging topics and analytical content in Company News as of 27-03-2024. The article titled " Lululemon Stock Drops 11% in 2025 After Weak Revenue Forecast—Watch Crucial $431 Support Level " provides new insights and practical guidance in the Company News field. Each topic is meticulously analyzed to deliver actionable information to readers.

The topic " Lululemon Stock Drops 11% in 2025 After Weak Revenue Forecast—Watch Crucial $431 Support Level " helps you make smarter decisions within the Company News category. All topics on our website are unique and offer valuable content for our audience.