Breakfast News: Fragile Outlook Hits LULU

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1. Disappointing Guidance Sends Lululemon Down Over 20%

Rule Breakers recommendation Lululemon (LULU -1.32%) fell after the closing bell despite posting earnings per share above market expectations. Concerns around a weak outlook and the operating macro environment were to blame.

• "In the U.S., consumers remain cautious right now and they are being very intentional about their buying decisions.": CFO Meghan Frank said weaker demand was being combined with higher costs, with the continuation of tariffs likely causing a significant reduction in profitability.
• U.S. comparative sales down 2% despite touting product newness: Fool analyst Sanmeet Deo, CFA reflected he would still hold the stock, noting "I think tariff issues could subside, but I'm watching how sales and traffic trends play out over the rest of the year."

2. Musk Feud Sees Tesla Stock Drop 14%

Hidden Gems rec Tesla (TSLA -14.11%) closed significantly lower Thursday, losing $152 billion in the biggest ever hit to its market cap, after CEO Elon Musk got involved in a public spat with President Trump about the proposed tax bill.

• Thawing tensions overnight provide some optimism: Reports of a scheduled call between Musk and the White House with the aim of brokering peace have lifted Tesla shares over 5% in pre-market trading. Musk's most recent posts on X indicate a softening of rhetoric, appearing to agree with a post calling for peace between the two.
• Implications for extent of government support: The clash spooked Tesla investors, with concern around what it might mean for regulation of the company, having expected a relaxed approach to new initiatives (such as self-driving) under the Trump administration.

3. Earnings Growth For DOCU, BRZE, and AVGO

Stock Advisor rec DocuSign (DOCU -0.82%) fell as much as 18% in pre-market trading after releasing results showing strong growth but coming with a warning of slowing momentum going forward.

• 24% more customers spending $500k or more annually compared with a year ago: Braze (BRZE -1.39%) took a hit in excess of 8% after hours even with a 19.6% increase in revenue versus the same quarter last year. However, management lowered the full-year adjusted earnings per share guidance, triggering the stock fall.
• "We expect growth in AI semiconductor revenue to accelerate...delivering ten consecutive quarters of growth": Even with a beat in expectations and upbeat comments from CEO Hock Tan, Broadcom (AVGO -0.44%) is down over 4% in pre-market trading. Some say investors had set the bar too high going into the earnings release, making it difficult to be impressed.

4. Next Up: Jobs Data Could Add to Trade Optimism

S&P 500 futures were up 0.4% first thing this morning, with optimism following a "very positive" phone call between President Trump and Chinese President Xi, as investors await key jobs data due at 8:30AM ET.

• Following on from the highest U.S. weekly jobs claims since October: The consensus figure for May Non-Farm Payrolls is 130k, down from the previous figure of 177k. Average hourly earnings are expected to modestly fall from 3.8% to 3.7%, with the unemployment rate likely to hold steady at 4.2%.
• A generous dividend cover of 2.0: Dividend Investor rec ABM Industries (ABM -2.04%) is slated to release earnings ahead of the market open. Investors will be watching for updates on free cash flow as well as growth in the key Technical Solutions segment.

5. Your Take

"In the short run, the market is a voting machine. In the long run, it's a weighing machine." – Benjamin Graham.

Keeping the legendary value investor's words in mind, which stock's daily price swing of -10% or more has recently made you think it could be a buying opportunity not to be missed? Discuss with friends and family, or become a member to hear what your fellow Fools are saying.