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Lululemon Earnings Beat, But Coronavirus Trouble Lies Ahead

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Shares of Lululemon  (LULU) - Get lululemon athletica inc. Report were falling slightly after a solid fourth quarter earnings report that reflected a period largely before the coronavirus pandemic took hold. 

The stock fell 1.89% to $197 a share, after having risen 3.71% in regular trading hours. 

The company withdrew guidance and said it is closing stores. 

Adjusted diluted earnings per share for the quarter ended February 2 came in at $2.28, beating Wall Street’s estimates of $2.25. Revenue was $1.4 billion, beating estimates of $1.83 billion. Comparable sales increased 20% year-over-year, beating estimates of 16.2%, while store openings took a hit. 

Here’s what management said in light of the virus situation:

“We have taken actions to close certain retail locations and to reduce operating hours. In February 2020, we temporarily closed all of our retail locations in Mainland China. All but one of these locations have since reopened. In March 2020, we temporarily closed all of our retail locations in North America, Europe, Malaysia, New Zealand, and we temporarily closed our distribution center in Sumner, WA. These locations currently remain closed. Due to the impact that COVID-19 is having across the globe, and the rapid and continuous developments, we are not providing guidance for fiscal 2020 at this time.” 

The stock had been down 23% year-to-date, in line with the S&P 500, leading into earnings. 

Wall Street had already modeled in less than 1% same-store-sales growth for the current quarter, given the virus. 

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