NEW YORK (TheStreet) -- Lululemon Athletica (LULU) shares were plunging more than 10% on Thursday after the yoga and athletic apparel maker delivered better-than-expected third-quarter earnings but said comparable sales in the final quarter of the year will be flat.
The Vancouver-based company reported net income of $66.1 million, or 45 cents a share, compared to $57.3 million, or 39 cents a share, in the third quarter of last year. Analysts, according to Thomson Reuters, had expected Lululemon to post earnings of 41 cents a share.
Third-quarter revenue rose 20% to $379.9 million from the year-earlier quarter, surpassing analysts' predictions of $376 million. Comparable-stores sales rose by 5% on a constant dollar basis, the company said.
Still, shares were dropping 10.9% to $60.91 at last check.
Lululemon warned Wall Street that fourth-quarter revenue would be in the range of $535 million to $540 million based on flat comparable-store sales. The company expects earnings per share to be in the range of 78 cents to 80 cents . Wall Street forecasts earnings of 84 cents a share.
For the full year, Lululemon expects revenue in the range of $1.605 billion to $1.61 billion and per-share earnings ranging from $1.94 to $1.96.
"We are proud of our third quarter results, with sales in line with our expectation and earnings ahead of our guidance and rebounding to a double digit growth rate." CEO Christine Day said in the earnings statement. "This so far has been a year of challenges, learning, and growth for lululemon, and while our outlook for the fourth quarter is being impacted by both macro and execution issues, I believe that the investments we are making in the business combined with the team in place create a strong platform for growth in the years ahead."