Shares in the yoga pants maker plunged by over 10% in pre-market trading as it said it expects sales growth to slow this year, hurt by cautious consumers who are limiting their spending amid an uncertain macroeconomic environment.
Lululemon (LULU) posted a 10% year-on-year rise in revenue, reaching $10.6bn (£82.bn), buoyed by the opening of new stores and growth at existing locations. Annual net income also increased, growing 17% to $1.8bn.
However, investors were not happy with the outlook, pushing the stock down 11% to $304.78 in pre-market trading. Although the company had previously updated its guidance for the holiday quarter in January, attention shifted to management’s forecasts for the upcoming fiscal year, which were less optimistic than anticipated.
For the year ending in January 2025, Lululemon (LULU) projected net revenue to range between $11.15bn and $11.3bn, representing a modest 5% to 7% increase. Analysts had anticipated a revenue growth of 7%, with expectations pointing to a total of $11.3bn.
Additionally, the company’s earnings per share guidance of $14.95 to $15.15 fell short of Wall Street's estimate of $15.37. Lululemon’s (LULU) forecast for the first quarter was also disappointing, with expected revenue ranging from $2.335bn to $2.355bn and earnings per share between $2.53 and $2.58. Analysts had predicted $2.39bn in revenue and $2.72 in earnings per share.
“We started this year with several compelling new product launches, but we also believe the dynamic macro environment has contributed to a more cautious consumer,” Calvin McDonald, chief executive, told analysts.
Shares of Rivian (RIVN), the electric vehicle maker, fell into correction territory in pre-market trading following a 7.6% surge on Thursday, amid growing investor optimism about its micromobility business expansion.
In a statement, Rivian (RIVN) revealed that it had secured $105m in investment from Eclipse Ventures to support its newly spun-out business, Also Inc., which will focus on developing small, lightweight electric vehicles.
Rivian’s (RIVN) founder and CEO, RJ Scaringe, expressed enthusiasm for the venture, saying: “For the world to fully transition to electrified transportation, a range of vehicle types and form factors will be needed. I am extremely excited about the innovations developed by the Also team that will underpin a range of highly compelling micromobility products that will help define new categories.”
Scaringe added that Also will display its first vehicle designs at an event in 2025.
In addition to this new business venture, Rivian (RIVN) underscored its ongoing progress toward launching the R2, a five-seater SUV designed for adventure. The company expects to begin customer deliveries of the R2 in the first half of 2026 as part of its broader expansion strategy.
Shares of Alibaba (BABA) slipped 1% in pre-market trading, even as its cloud computing arm unveiled a new AI model designed for multimodal applications.
The Qwen2.5-Omni-7B model is a unified system that can process text, images, audio, and video inputs, generating real-time text and speech outputs. This release follows the company's earlier update of the Qwen 2.5 model in January.
With 7 billion parameters, the compact Qwen2.5-Omni-7B offers strong performance and is open-sourced, available on platforms like Hugging Face and GitHub. Alibaba (BABA) highlighted the model’s optimisation for edge devices such as smartphones and laptops, positioning it as a tool for cost-effective AI agents, including potential applications for the visually impaired through real-time audio guidance.
The launch comes amid growing competition from Chinese peers such as Baidu (BIDU) and Tencent (TCEHY), which are also expanding their AI capabilities following the introduction of DeepSeek's R1 model last year.
Shares in the French video maker rose more than 10% in Paris after it announced plans to set up a subsidiary in which Tencent (TCEHY) will invest €1.16bn (£967m)
Ubisoft (UBI.PA), the creator of the Assassin's Creed series, announced on Thursday that the subsidiary would be valued at approximately €4bn (£3.3bn) and would bring together its flagship brands, including Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six.
The new entity will focus on developing these three major franchises and aims to bolster Ubisoft's (UBI.PA) financial standing. CEO Yves Guillemot said that the subsidiary would play a crucial role in strengthening the company’s balance sheet.
Morningstar said in a note: "Ubisoft gains financial flexibility with the cash infusion, which equates to about two thirds of the firm's pre-announcement market cap."
Shares of WH Smith (SMWH.L) rose in early European trading following the announcement that the retailer had sold 480 of its stores to investment company Modella Capital, the owner of Hobbycraft, for £76m.
As part of the deal, the high street business, which employs 5,000 staff, will be rebranded as TGJones, while WH Smith (SMWH.L) will retain its brand for its travel-focused stores. WH Smith will also keep its nearly 1,300 travel stores and its online business.
The company also revealed that it is exploring "strategic options," including a potential sale of its digital greetings card business, Funky Pigeon. While WH Smith (SMWH.L) expects to realize £52m in cash proceeds from the sale, it will net only £25m after transaction and separation costs.
Carl Cowling, the group chief executive at WH Smith (SMWH.L), said: “As we continue to deliver on our strategic ambition to become the leading global travel retailer, this is a pivotal moment for WH Smith as we become a business exclusively focused on travel.
“As our travel business has grown, our UK high street business has become a much smaller part of the WH Smith Group (SMWH.L). High street is a good business; it is profitable and cash generative with an experienced and high-performing management team.
“However, given our rapid international growth, now is the right time for a new owner to take the high street business forward.”
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