The U.S. market demand is sluggish, sales guidance falls short of expectations, Lululemon's stock price plunges by 11%

Luxury yoga pants brand Lululemon recently disclosed that its US store sales have declined at the beginning of this year, leading to the company's first-quarter and full-year sales guidance falling short of expectations.

After the news was announced, Lululemon's stock price plummeted by 11% in after-hours trading.

Lululemon CEO Calvin McDonald stated during Thursday's analyst conference call that customer purchases at US stores have declined across the board compared to the same period last year.

He further pointed out that consumer enthusiasm in the US market this year appears to be somewhat subdued compared to previous years, while all international markets, including Canada, have maintained strong growth momentum.

Lululemon expects revenue for the fiscal year to reach $10.7 billion to $10.8 billion, an increase of 11% to 12% year-on-year, significantly lower than last year's 19%. Diluted earnings per share are expected to be between $14.00 and $14.20.

However, it is worth noting that despite market fluctuations after the pandemic, Lululemon has still delivered impressive performance, maintaining double-digit sales growth, which is significantly better than many American apparel companies.

In the fourth quarter ending January 28, 2024, Lululemon's net revenue increased by 16% year-on-year to $3.2 billion; gross margin rose by 430 basis points to 59.4%; diluted earnings per share were $5.29. For the 2023 fiscal year, net revenue increased by 19% year-on-year to $9.6 billion; diluted earnings per share were $12.20.

Additionally, Lululemon typically provides conservative performance forecasts, but actual results often exceed expectations.

Analyst Poonam Goyal stated, "Lululemon is likely to exceed its cautiously set expectations." She also pointed out that Lululemon has great potential for development, especially in overseas markets and men's products