Wall Street Breakfast Podcast: A Tough Stretch For Lululemon

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Another forecast trim, a China slowdown, and rising competition send lululemon (LULU) shares tumbling. (00:15) The robotaxi era begins with little fanfare as Tesla (TSLA) rolls out Cybercab rides in Austin. (01:49) Volkswagen (VWAGY) is preparing another 50,000 job cuts. (03:03)

This is an abridged transcript.

lululemon athletica (LULU) is a trending topic on Seeking Alpha.

LULU shares are underwater after the company cut its full-year sales guidance again and realized a much larger than expected decline in sales as China continues to disappoint and rivals gain ground in the U.S.

“While we continue to navigate some challenging dynamics, we are taking a prudent approach with our revised full-year outlook,” said Lululemon interim co-CEO Meghan Frank.

Although a new CEO is set to take over next week, lululemon (LULU) is expected to limp through the remainder of the year with another cut to sales guidance, now expected to contract by 5% to 7% to a range of $10.35B to $10.50B.

Moreover, the company now expects to earn a profit of $9.48 to $9.73 per share, down from between $10.95 to $11.15 per share and below the $10.93 per share estimate.

For the current quarter, net sales are expected to decline by 10% to 11%.

The downbeat outlook reflects second-quarter results in which revenue decreased 4% and comparable sales were down 9%, both of which were worse than expected.

Including an $0.86 per share benefit from tariff refunds, lululemon (LULU) earned a profit of $2.92 per share, down 6% year-over-year but better than expectations.

Shares are down 18% in premarket action.

Tesla (TSLA) will begin offering Cybercab rides in “limited areas” of Austin, Texas today, while its highly anticipated launch event ended on a fairly muted note.

There are 45 Cybercabs registered in Texas. The company did not include details on fares when they announced the launch on Thursday.

As for the event, there was no public livestream or journalists. The Verge reported that it had a very short invite list comprised largely of pro-Tesla (TSLA) content creators.

Attendees told Reuters that Elon Musk skipped the event. Executives discussed the Cybercab’s manufacturing process and technology for about a quarter of an hour.

The golden two-seater vehicle is fully autonomous with no steering wheel or pedals, using camera vision and sensors for navigation. Tesla (TSLA) previously said the cost would be less than $30,000.

Children under the age of 13 are not permitted to ride in a Cybercab. Minors aged 13-17 can travel in a Cybercab if accompanied by an adult.

Shares of Tesla (TSLA) ended 5.4% higher on Thursday ahead of the Cybercab event, but are down 1.6% premarket.

Volkswagen AG (VWAGY) is getting rid of more people.

The company said on Thursday that its supervisory board has approved a wide-ranging restructuring program that includes a further reduction of 50,000 jobs.

The board voted unanimously on Thursday to endorse the company’s “Future Plan” for transforming the Volkswagen (VWAGY) Group and its brands. The program is intended to make the business more efficient and competitive and to better prepare it for the future.

The additional job cuts would take Volkswagen’s (VWAGY) expected workforce reduction to 100,000. The group also plans to cut the number of models it offers by around half by 2035 and reduce its holdings.

Volkswagen (VWAGY) said it would provide further details of the plan in the near future.

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Stock index futures are largely flat as investors focus on the upcoming jobs report.

Crude oil is down 0.5% at $90. Brent crude is down 0.4% at $95.

The FTSE 100 is little changed and the DAX is little changed.

Economic calendar:

• 8:30 am Employment Situation: The August jobs report is expected to show nonfarm payroll additions of 55,000 for the month, a 4.1% unemployment rate, and 3.0% year-over-year wage growth.

• It is officially just 60 days before the U.S. midterm elections, which some analysts indicate is the beginning of the window when investment managers start making election-related portfolio changes.

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Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.