Lululemon Warning On Covid Weighs on Shares, Estimate-Beating Results Ignored

This post was originally published on this site – Lululemon (NASDAQ:LULU) shares were trading weaker in Wednesday’s premarket as traders chose to give weight to the company’s warning of any Covid-19 resurgence, ignoring its January quarter financial results that beat expectations.

The company reported $1.7 billion in net revenue for the quarter, a 24% rise from the same period a year earlier. More than half of net revenue came from selling directly to consumers. This was one-third of total revenues in the fourth quarter of 2019.

Comparable sales—which typically include sales at stores open for at least a year—rose 21%. Demand for women’s apparel was robust and so were online sales in a pandemic year.  

For fiscal 2021, the company expects net revenue to be in the range of $5.55 billion to $5.65 billion.

Last quarter, Lululemon executives were cautious about the holiday season, as elevated Covid-19 cases forced governments across states to reimpose limits on physical stores. Both full-year and quarterly results came ahead of the company’s expectations, CEO Calvin McDonald said Tuesday.

But the estimate-beating results didn’t impress the traders enough who were more influenced by its forecasts, which warned that any new restriction could hurt consumer demand. The shares were down 2.4% in premarket trading by 8:36 AM ET (1236 GMT).

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