Lululemon Athletica Inc. (NASDAQ:LULU) stock plunged in premarket trading Friday after the athletic apparel retailer reported mixed first-quarter results, issued second-quarter guidance well below Wall Street expectations, and lowered its full-year outlook.

Revenue Tops Estimates, Earnings Miss

Lululemon reported first-quarter revenue of $2.47 billion, up 4% from a year earlier and ahead of analysts’ estimates of $2.43 billion. On a constant-currency basis, revenue increased 2%.

Adjusted earnings came in at $1.69 per share, narrowly missing consensus estimates of $1.70 per share.

Comparable sales increased 1% year over year. On a constant-currency basis, comparable sales declined 2%.

Gross margin fell 410 basis points to 54.2%, primarily due to tariff-related costs, higher markdowns, and fixed-cost deleveraging.

Operating margin declined to 11.2% from 18.5% a year earlier as profitability came under pressure from rising costs and higher operating expenses.

Inventory totaled $1.7 billion at quarter-end, up 2% in dollar terms but down 4% in units. The company ended the quarter with $1.5 billion in cash and cash equivalents.