What: Shares of lululemon athletica (NASDAQ:LULU) were down 12.8% as of 3:00 p.m. Wednesday EST after the yoga apparel retailer released lower-than-expected fiscal third-quarter revenue and reduced its full fiscal year guidance.

So what: Quarterly revenue climbed 14% year over year to $479.7 million, helped by new locations and a 9% constant-dollar increase in total comparable sales. The latter included 6% constant-dollar growth in comparable-store sales, and a 21% increase in direct-to-consumer comps. Revenue from the direct-to-consumer segment rose 16% to $89.3 million, increasing its share of Lululemon's total revenue by 200 basis points year over year to 18.6%.

Trending toward the bottom line, however, income from operations fell 16% year over year to $68.2 million, while net income declined 12.1% to $53.1 million. Thanks to share repurchases over the past year -- including 1.6 million shares bought back at an average cost of $55.50 per share in Q3 -- net income per share declined a more modest 9.5% to $0.38.

Analysts, on average, were anticipating roughly the same earnings per share on higher revenue of $482.1 million.

Even so, it's worth noting Lululemon's top line was firmly within its own guidance, which called for revenue of $477 million to $482 million, while earnings were above the high end of Lululemon's per-share outlook of $0.35 to $0.37.

Lululemon CEO Laurent Potdevin echoed that information, stating, "We had a solid quarter in line with our expectations underscored by the combination of our product, guest and community initiatives along with tremendous guest reception to major store openings around the world. [...] We've implemented critical organizational changes this quarter and now have in place a complete, world-class management team that is aligned with our strategic global priorities focused on design and dedicated to creating long-term value."

Now what: At the same time, however, the market is even less enthused about Lululemon's guidance.

For the current quarter, Lululemon expects revenue of $670 million to $685 million, with diluted earnings per share of $0.75 to $0.78. Both ranges are well below consensus estimates, which called for earnings of $0.86 per share on revenue of $690 million.

Similarly, for the full fiscal year 2015, Lululemon now sees revenue of $2.025 billion to $2.04 billion, and diluted earnings per share of $1.81 to $1.84. Wall Street was modeling higher earnings of $1.91 per share, and revenue of $2.05 billion. 

During the subsequent conference call, Lululemon CFO Stuart Haselden explained "[T]rends in our business have been mixed, with traffic trends soft to start Q4 followed by some improvements since Thanksgiving."

At the same time, Haselden noted Lululemon is now seeing its gross margin recovery taking shape in Q4, and elaborated that the company expects this recovery to accelerate into fiscal 2016. In the end, I admit that temporary softness on the top line early in the current quarter isn't ideal. But I'm also encouraged that it seemed to prove short-lived. As a Lululemon investor myself, that's why I have no problem continuing to hold my shares.

Steve Symington owns shares of Lululemon Athletica. The Motley Fool owns shares of and recommends Lululemon Athletica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.