shares jumped late Wednesday after the retailer reported
better-than-expected first-quarter results.
- Profits and revenue topped analysts’ expectations,
though guidance came in lower than expected.
- Shares have risen 40% this year, handily outperforming
the broader market.
Lululemon trade live.
reported a second-straight quarter that impressed investors,
sending shares higher by 3% late Wednesday.
The athleisure retailer’s first-quarter profits and sales topped
analysts’ expectations, while its full-year earnings-per-share
guidance came in lighter than was forecast. The strong headline
numbers followed last quarter’s
blowout results that sent the stock soaring back in
“Lululemon continues to see strong momentum across the entire
business,” Calvin McDonald, the company’s chief executive officer,
said in the statement.
The quarterly results highlight Lululemon shares’ breakneck
rally in recent years as the market has bet on investors embracing
athletic apparel, as well as the company’s
push beyond its core women’s athleisure offerings. The stock
has soared 230% over the past two years, handily outperforming the
broader market’s 19% gain during that time.
Here’s what Lululemon reported ,compared with what analysts
surveyed by Bloomberg were expecting:
Revenue: $782.3 million ($756 million
Adjusted earnings per share: $0.74 ($0.70
Full-year EPS guidance: $4.51 to $4.58 (the
company originally expected $4.48 to $4.55)
Wall Street expects profits and sales to rise over the next
three quarters, according to Bloomberg estimates, with analysts
broadly positive on the retailer. Of those polled by Bloomberg, 21
recommend “buy,” 13 recommend “hold,” and one says “sell.” The
average analyst’s price target of $184.77 implies a rally of 8%
from current levels.
While investors are likely to focus on near-term trends,
Lululemon is well-positioned for the long-term, Credit Suisse
analysts wrote Wednesday. The firm is encouraged by Lululemon’s
efforts in menswear, its international expansion, and the
loyalty program it debuted late last year.
John Morris, an analyst at D.A. Davidson, lifted his
earnings-per-share estimates last month as a result of his positive
outlook for Lulu’s merchandising margins. He holds a “neutral”
rating on the stock.
“Given the strength of average pricing remaining higher on both
total average price and markdown average price, expecting gross
margin to exceed consensus, although this is likely factored into
the stock,” Morris wrote.
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Lululemon's profits and sales top Wall Street's expectations — again (LULU)