lululemon athletica (LULU -0.10%) failed to impress investors when it reported fiscal 2014 first-quarter earnings before the market opened today; shares were down more than 15% as of 10 a.m.
For the period ended May 4, the upscale athletic apparel company generated a profit of $0.34 per diluted share, which was above its prior guidance for earnings in the range of $0.31 to $0.33. This was also $0.02 better than analyst expectations for earnings per share of $0.32 in the period.
Lululemon's revenue climbed 11% to $384.6 million in the period, up from $345.8 million during the same period a year ago. For comparison, Wall Street was looking for quarterly revenue of $381.24 million. Additionally, lululemon reported same-store sales growth of 1% in the quarter and said it would begin a $450 million share buyback program to enhance shareholder value. The buyback program is expected to be completed in two years.
Unfortunately, this wasn't enough for investors, who pushed lululemon athletica stock lower. It seems much of the good news was offset by weak guidance for its current quarter. The retailer said it expects second-quarter net revenue in the range of $375 million to $380 million and a comparable-sales decline in the low to mid-single digits.
Shares of lululemon are down 25% year to date.
Lululemon also announced today that Chief Financial Officer John Currie plans to retire by the end of the fiscal year. The company said it would hire an executive search firm to help find a replacement. CEO Laurent Potdevin was quoted as saying, "I want to thank John for his significant contributions to the success of lululemon since he joined the company in 2007. He played an integral role in taking lululemon public more than seven years ago and his role in shaping the direction and performance of the company since then has been vast. We look forward to working with John through the transition, and we wish him well as he takes full advantage of his retirement enjoying his new boat and getting in lots of powder days on the slopes."
