Lululemon Falls as Sales Growth Shows Signs of Cooling Down

(Bloomberg) -- Lululemon Athletica Inc. posted another quarter of double-digit sales growth, but shares fell as the pace showed signs of tapering off.

Key Insights

• Comparable-store sales rose 18 percent in the third quarter, beating analysts’ projection for a 13.6 percent gain. But the company forecast the key gauge would slow to high-single or low-double digits in the fourth quarter.
• Lululemon is the latest example of a retailer growing rapidly, but not enough to please investors. In this case, it was comparable-store sales that are expected to slow this quarter from 18 percent in the third quarter and a 19 percent gain the previous period.
• E-commerce sales surged 46 percent on a constant currency basis. But with Lululemon’s website still relatively young, these comparisons may be getting tougher going forward.

Market Reaction

• Shares fell as much as 14 percent in late trading before paring losses. They’ve gained 67 percent this year through Thursday’s close.
• For more details on the results, click here.

To contact the reporter on this story: Sandrine Rastello in Montreal at srastello@bloomberg.net

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Jonathan Roeder, Anne Riley Moffat

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