Lululemon Athletica Inc. said Monday it expects holiday quarter gross margins to decline as the apparel maker grapples with increased costs amid a drop in consumer spending due to persistently-high inflation.
Shares of the yoga pant maker fell 12.53% to $288.36 in premarket trading at 7:28 a.m. EST.
The company said it expects gross margin to decline 90 to 110 basis points in the fourth quarter, compared to its previous expectation of an increase of 10-20 basis points.
Lululemon, however, said it expects fourth-quarter net revenue to be in the range of $2.66 billion to $2.70 billion, compared with 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 its prior expectation of $4.20 to $4.30.
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