Lululemon Athletica reported a weak FQ4.

Typical weak guidance went far beyond normal levels showing an unexpected downturn in sales.

The stock continues to trade at a premium valuation despite being another retail wreck.

Lululemon Athletica (NASDAQ:LULU) was set up for disaster. Despite a weak retail environment and a competitive landscape for athletic wear, the stock still traded at a premium valuation.

Though the stock did peak back in August above $80, Lululemon still traded above $70 to start the year. As detailed in my previous investment thesis, the stock traded at an extreme premium to the likes of Nike (NYSE:NKE) and Under Armour (NYSE:UAA) questioning the reason to chase and much less own the stock.

After the close, Lululemon reported FQ4 results that disappointed the market. A small $0.01 miss on 12% revenue growth wasn’t exactly horrible considering the weak retail environment, the big issue though was the horrible guidance.

Lululemon has a history of guiding low. As an example, the yoga pants company guided FQ4 revenues about 2% below analyst estimates at the FQ3 earnings report. For the current quarter, the company guided to revenues of $512.5 million at the midpoint with estimates up at $552.4 million. The $40 million guide down on a lower revenue target ends up as a very large 7.2% guide down.

Sure, Lululemon will end up beating the lowered estimates,…