Investing.com - Lululemon Athletica (NASDAQ:LULU) shares slumped Friday after the athletic apparel maker flagged slower demand since the turn of the year amid a weak shift in the U.S. consumer.
At 10:35 ET (14:35 GMT), Lululemon shares fell almost 18% to $394.68, down 23% year-to-date.
Lululemon Athletica reported earnings of $5.29 per share on revenue of $3.21 million. Analysts polled by Investing.com anticipated EPS of $5.00 on revenue of $3.20 million.
The beat was driven by improved margins amid lower freight costs, with gross margin rising to 59.4% from 55.1% a year earlier.
Comparable sales increased 12%, with Americas sales up 7% and international up 43%.
However, these positive earnings were overshadowed by weak guidance, as demand wanes for the apparel retailer's premium athleisure mainly in the North American region.
For Q1, the company sees EPS in a range of $2.35 to $2.40 on revenue in the range of $2.175B to $2.20B, missing estimates of $2.58 on revenue of $2.28B.
Looking ahead, the company forecast full-year EPS in the range of $14.00 to $14.20 revenue to between $10.70B and $10.80B. That compared with analyst estimates for earnings of $14.26 per share on revenue of $10.94B.
Lululemon's first-quarter sales are off to a slow start in North America and the consumer environment in the U.S. has been somewhat challenging, CEO Calvin McDonald said in a post-earnings call.
"LULU's outlook fell below expectations, and signals a considerable moderation in growth," according to analysts at Jefferies, in a note dated March 21.
"Shifting consumer preferences are challenging demand levels across the co's assortment. While intl sales were healthy, NA comprises 80% of sales and is slowing, which calls for concern. With mkt cap levels becoming
increasingly difficult to defend, it's clear LULU's dominance is waning," Jefferies added.
The investment bank has an 'underperform' rating, and a 12-month price target of $300.
(Yasin Ebrahim contributed to this article.)