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Lululemon's Downward Dog on Lower Outlook

NEW YORK ( TheStreet) - Lululemon Athletica (LULU - Get Report) shares fell 7% in pre-market trading as the yoga apparel maker tempered investor expectations for the rest of the year, despite a better-than-expected second quarter.

The Vancouver-based company said net income slipped to $56.5 million compared to a year earlier. Lululemon's diluted earnings of 39 cents a share stayed the same as the second quarter of 2012.

Net revenue for the quarter jumped 22% to $344.5 million, while comparable stores sales increased by 8% on a constant dollar basis, the company said.

Analysts, on average, expected the company to earn 35 cents a share on $343 million, according to Thomson Reuters.

Shares were falling 7% to $64.20 before the markets opened.

Also see: Vera Bradley Tanks on Cautious Outlook

Lululemon tempered Wall Street expectations for the remainder of the year. The retailer expects third-quarter revenue to be in a range of $370 million to $375 million, on assumptions of "mid-single digits" comparable store sales, compared to expectations of $380 million. Lululemon expects earnings of 39 cents to 41 cents a share in the quarter, compared to expectations of 44 cents a share.

For the full year, net revenue is expected to be in a range of $1.63 billion to $1.64 billion and earnings between $1.94 to $1.97 a share. Wall Street was expecting full-year revenue of $1.67 billion and earnings of $1.99 a share.

Earlier this year Lululemon announced that CEO Christine Day is stepping down once a successor is found. Today's earnings release did not elaborate on any details of the search process, but investors will surely be listening in on the company's conference call this morning to hear any news.

This year "continues to be the most important and most productive year in lululemon's history," Day said in the earnings statement. "We have not only worked our way back from the black luon setback, but have also added very talented people in important functions and have taken major steps forward on a number of key fronts including the expansion of our international and men's businesses and many logistical initiatives."

"We are well on our way to finishing 2013 as a much stronger company than when the year began. I am confident that the leadership currently in place coupled with a new CEO will have tremendous success leveraging the platform for growth," Day said.

-- Written by Laurie Kulikowski in New York.

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