Lululemon shares pop 12% despite lackluster earnings and guidance

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Lululemon is still seeing sales grow in North America but at a far slower pace than the past, raising concerns from investors about its future growth potential.

Lululemon beat Wall Street's earnings and revenue estimates, but issued weak second-quarter guidance as it contends with a slowdown in the Americas, its largest market.

The company's reported net income for the three-month period that ended April 28 was $321 million, or $2.54 per share, compared with $290 million, or $2.28 per share, a year earlier.In a news release, CEO Calvin McDonald touted the"strong momentum" the company is seeing in its international markets and hinted that it needs to do more work in the Americas to grow in the region again.

Lululemon is still growing in the Americas, but at a much slower pace than last year. During the first quarter of this year, sales in the Americas increased 3%, versus a 17% jump in the year-ago period. Comparable sales were flat from last year.

 

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