Lululemon Athletica the yoga wear retailer based in Canada posted growth in comparable sales that came up short of expectations on Wall Street.
The news in turn sent shares of the company down over 9% Thursday, even though earnings had been in line with analyst expectations.
Sales during the second quarter online and at its stores that were opened a minimum of one year were up 5%, excluding the fluctuations in exchange rates. Analysts that were polled were expecting an increase of 5.9%.
One Wall Street analyst said that comparable sales missing the mark would likely fuel some anxiety amongst investors due to the high expectations and the strong performance of stock at Lululemon.
Prior to the posting of its earnings, shares at the company were up more than 46% since the start of 2016.
During the company’s conference call with investors and analysts, Stuart Haselden the CFO reminded listeners that the company had a promotion online during the second quarter of 2015.
Excluding all impact of that special offer, he said that comparable sales would have been up another 2%.
Retail sales in the U.S. were flat during July, as many consumers did not spend as much of their discretionary income.
The company, based in Vancouver, forecast earnings for its fiscal third quarter to be 42 cents to 44 cents per share. Analysts were expecting earnings to be 44 cents during the quarter.
Once a darling of the market, thanks to it exceptionally strong move into the United States market, which is something few retailers from Canada have accomplished, the company has been struggling with product recalls that have embarrassed them and problems with inventory the past few years.
Levels of inventory were down 1% during the just ended quarter, to end at $277.2 million.
The business helped bring more expensive yoga pants for women into mainstream fashion prior to expanding into other products such as running wear.
It now also has a line of men’s clothing and a line of athletic clothing for youngsters. The company competes with the likes of Under Armour and Nike along with mainstream retailers of clothing such as Nordstrom and Gap.
Net income for the quarter was up closing at $53.6 billion equal to 39 cents per share. Revenue increased by 14% to end the quarter at over $514.4 million. Excluding a tax as well as another interest adjustment, its earnings ended at 38 cents per share.