Lululemon Gives a Sober Holiday Outlook

The yoga retailer downgraded its sales forecast for the fourth quarter.
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Eliza Brooke
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The yoga retailer downgraded its sales forecast for the fourth quarter.
A participant in a Lululemon yoga class in London. Photo: Ben A. Pruchnie/Getty Images

A participant in a Lululemon yoga class in London. Photo: Ben A. Pruchnie/Getty Images

When Laurent Potdevin stepped into the role of CEO at Lululemon last January, he described 2014 as a year of "transition" for the company. With bad press from a production run that left some of its yoga pants transparent followed by some seemingly exclusionary comments from founder Chip Wilson weighing on its reputation, the upscale athletics retailer was in a tough spot. Meanwhile, the number of entrants into the women's athletics space exploded.

So as Lululemon heads into the final quarter of the year, the question is, how has that transition gone? 

Okay, it seems. Revenue has grown at a significantly slower rate than it has in years past. In the third quarter of this year, which wrapped up Nov. 2, sales grew 10 percent to $419.4 million. That same time period in 2013 resulted in a 20 percent sales gain; in 2012, revenue grew 37 percent in the third quarter. But considering that Lululemon was tasked with winning back consumers' trust while trying to divert their attention from the other athletics brands cropping up, it makes sense that the company wouldn't be growing by the same leaps and bounds it has in the past.

That said, it looks like Lululemon will close out the year slightly below expectations. According to its third quarter financial report, released Thursday morning, it expects revenue for the full year to clock in between $1.765 billion and $1.78 billion — as of September, the company was expecting something more in the range of $1.78 billion to $1.8 billion. 

The reason? Lululemon expects its fourth quarter — a.k.a. holiday season — revenue to take a hit from port delays on the West Coast, a lower Canadian dollar and delayed store openings.

Here's to 2015.