Leading up to the holiday season — that is, in the third quarter of the year, or the three months ending Nov. 1 — Lululemon saw its revenue hit $479.7 million, up 14 percent relative to the same period last year. Within those numbers, there was some good, some bad. It was kind of mostly bad. Let's break it down.
As far as product is concerned, executives reported some bright spots on the company's quarterly earnings webcast Wednesday morning. Thanks to the new line of pants the brand introduced this September, women's bottoms and bras performed particularly well, with the former up 27 percent during the third quarter and the latter jumping 18 percent. Lululemon's men's business also outpaced overall company growth, with that category growing about 20 percent.
But while those styles performed well, product isn't flying off the shelves to the extent that the brand might like. Lululemon is currently dealing with high levels of unsold seasonal inventory, which it's trying to clear through warehouse sales, one of which took place this past October in Boston. Two more warehouse sales are planned for the U.S. and Canada in the fourth quarter. (So if you're a Lululemon superfan, keep an eye out for those, and note that they'll be in-person affairs.)
More bad news: Lululemon's profit shrunk during the quarter, and it lowered its net revenue outlook for the full year, news of which sent its stock down about 8 percent on Wednesday morning.