The yoga pants maker blamed a weak currency and delays at West Coast ports for its outlook. Quarterly earnings were a mixed bag. Fred Katayama reports.
Lululemon won't be pocketing as much profit this holiday season. The maker and retailer of those famous yoga pants cut its forecast for the current quarter. It's blaming a weaker currency, delays at West Coast ports and in opening new stores. Its quarterly earnings were a mixed bag. Online sales surged as it tried to slash inventory with steeply discounted prices, pushing up revenue. But its quarterly profit fell as margins extended their decline. Lower taxes helped results beat expectations. Lululemon has been trying to bounce back from last year's costly recall of its see-through yoga pants. That was followed by controversial remarks from its founder and the departure of some key executives. And it now faces increased competition from Nike, Under Armour and Gap. Lululemon's shares, down more than 20 percent this year, rose sharply in early trading. BB&T Capital senior analyst Paul Alexander said the weakened outlook could dampen investor interest, adding, "While third quarter comps and the fourth quarter outlook represent a pickup versus the first half, the pickup isn't especially strong, and fourth quarter comp guidance is slightly below consensus."