Investing

Lululemon Finally Gets a Break

Douglas A. McIntyre

Published: December 6, 2024 7:45 am

Key Points

• Lululemon Athletica Inc. (NASDAQ: LULU) stock popped after it posted strong quarterly earnings.
• However, not all its numbers were encouraging.
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After a year in which its stock took a horrible beating, shares of Lululemon Athletica Inc. (NASDAQ: LULU) rose almost 10% on strong earnings. Before the most recent quarterly report, shares were down 24% in the past year, compared to a 33% gain in the S&P 500.

Revenue for the period was $2.40 billion, topping the consensus estimate of $2.36 billion. Earnings came to $2.87 per share, compared to an expected $2.75. The company increased its full-year forecast to a spread of $10.452 billion and $10.487 billion, up from a previous range of $10.375 billion to $10.475 billion.

U.S. sales were disappointing, but overseas revenue surged. American comparable store sales dropped 2%, while the international figure rose 25%. Lululemon CEO Calvin McDonald said, “Our performance in the third quarter shows the enduring strength of lululemon globally, as we saw continued momentum across our international markets and in Canada.” He said the company’s focus was to improve American revenue. The company added 28 company-owned stores in the quarter to 749.

For years, there were concerns that Lululemon would lose market share to Nike, Under Armour, Levi Strauss, Ralph Lauren, and small retailers that sell casual and athletic wear. The new earnings show that it is at least holding its own.

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