Lululemon Athletica Inc said Monday that it expected holiday quarter gross margins to decline as the apparel maker grapples with increased costs amid a slump in consumer spending due to continued high costs. inflation,
Shares of the yoga pants maker fell more than 10 percent to $295.21 in premarket trading.
The company said it expects gross margin to decline by 90 to 110 basis points in the fourth quarter, compared to its previous expectation of 10-20 basis points growth.
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However, Lululemon said it expected fourth-quarter net revenue to be between $2.66 billion and $2.70 billion, compared to its previous range of $2.61 billion to $2.66 billion.
It also expects diluted earnings per share to be in the range of $4.22 to $4.27, compared to a prior expectation of $4.20 to $4.30.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shailesh Kuber and Saumyadeb Chakrabarty)