LULU falls 9% after 6 months of gainsFriday, 08 June 2012
Hong Kong shares could start higher on Thursday, tracking the
overnight gains on Wall Street on signs that European policymakers could decide on a solution for ailing Spanish bank and the U.S. may take action to boost its economy.
Across the Pacific, and in an effort to boost sales amid increasing online competition, U.S. retailers are accentuating the shopping experience in an. With consumer spending on the rise, the industry will boost capital spending to $35 billion this year, compared with $29 billion in 2009, according to Fitch Ratings.
“We think the consumer is getting more confidence, and with that, the stores are getting more confident to expand,” said Laura Pomerantz to Bloomberg, founder of commercial real estate advisory firm PBS Real Estate LLC in New York. “Stores have to be entertainment; they have to be service-oriented, which has clearly become very, very important to the consumer.”
Big news was Lululemon Athletica Inc’s decline, the sharpest in six months after projecting full-year earnings and sales that trailed analysts' estimates. Lululemon fell 9.2 percent to $63.57 at 12:42 p.m. in New York, after earlier tumbling as much as 10 percent for the biggest intraday drop since Dec. 1. The stock had soared 50 percent this year before Thursday, published the ‘San Francisco Chronicle’. “The company, which has added running gear and men's clothing and expanded its ivivva athletica brand, may be hurt by a slowdown in demand,” said Edward Yruma, an analyst at Keybanc Capital Markets in New York. Full-year profit will be as much as $1.60 per share, the company said today in a statement. Analysts projected $1.63, the average of 24 estimates compiled by Bloomberg. Revenue for the year will total as much as $1.34 billion, trailing the $1.35 billion average of analysts' estimates. In March, Lululemon had projected full-year profit of as much as $1.57 a share on sales of a maximum of $1.33 billion.