This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Dumbest Things on Wall Street This Week

3. Lulu Takes a Licking

Forget the 12 days of Christmas, it was the 12 days of January that caused Lululemon (LULU - Get Report) shares to crater.

Well, maybe not the full first 12 days of January. It's more like 11 and a half days if you count store closings and shortened hours for the New Year's holiday, but still.

Here's what happened. Lulu's stock took a licking Monday, Jan. 13, dropping 17% after its Chief Financial Officer John Currie lowered the yoga-wear retailer's fiscal fourth-quarter guidance range. Currie told the Street he's now looking for per share earnings of 71 to73 cents on revenue of $513 million to $518 million for the period ending Feb. 2. That's substantially lower than the company's prior guidance of 78 to 80 cents per share on revenue of $535 million to $540 million.

Must Read: The 5 Dumbest Things on Wall Street This Week: March 8

Honestly, it would have been fine with us if he came clean like everybody else and said holiday sales flat-out sucked. But no, as always, Lulu has to be different.

"We were on track to deliver on our sales and earnings guidance through the month of December; however, since the beginning of January, we have seen traffic and sales trends decelerate meaningfully," claimed Currie. "Based on this recent performance and assuming these trends continue through the remainder of January, we are reducing our outlook for the fourth quarter."

We know we're nitpickers, nevertheless, let us get this straight.

Nearly every single merchant in the mall from American Eagle to Zumiez has lowered guidance in the past two weeks due to crummy Christmas sales. Things were so bad over the holidays at J.C. Penney (JCP) that the retailer decided to simply skip its December same store sales results. That's right, not report them at all!

And did you see what happened to Best Buy's (BBY) shares Thursday when it posted domestic holiday comps down 0.9%? They went Kaboom!

Currie, however, wants us to believe that December was decidedly dandy for Lulu -- and Lulu alone. If we are to believe him, Lulu is cutting sales projections by as much as $27 million due to a slowdown during a short, promotional window in January as opposed to the all-important Christmas period.

Sorry, but like Lulu's merchandise, we're not buying it, and, as evidenced by the stock's shellacking, nobody else is either.

Look. We know Lulu's new CEO Laurent Potdevin really wants to chart a new course after last year's string of gaffes. Still, it would have been fine for Lulu to join the pack in this case instead of making bold pronouncements that skeptical folks like us would pore over.

After last year's sheer pants debacle, Lulu should know the importance of taking cover when you can get it.

3 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
PETM $82.98 0.04%
BA $134.80 0.00%
ICPT $150.74 0.00%
LULU $65.55 0.00%
SODA $13.72 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs