Will Lululemon Outshine Nike on Earnings? (LULU, NKE)

This Thursday will bring earnings reports from both Lululemon Athletica Inc. (NASDAQ: LULU) and Nike Inc. (NYSE: NKE).  Nike is a far larger company and far more important in the world of finance when it comes to peers, but Lululemon has a much more volatile history around earnings with large moves that attract traders.  Lululemon is now within 2% of its all-time just hit last week and it has a market value of $10.5 billion.  Nike hit yet another all-time high of $112.50 on Monday and its market value is over $51 billion.

Lululemon Athletica has estimates from Thomson Reuters of $0.49 EPS on $362.37 million in revenues; next quarter estimates are $0.30 EPS on $257.07 million in revenues.  For the year January 2013, estimates are $1.60 EPS on $1.31 billion in revenues.  Lulu hit a new high of $74.50 on Friday and the consensus analyst target is $67.94.   Nike has estimates from Thomson Reuters of $1.16 EPS on $5.8 billion in revenues.  The coming quarter is expected to be $1.41 EPS on $6.59 billion in sales.  Analysts have a consensus target of $112.69 for Nike.

Nike often beats earnings, but on a predictable basis.  It also had wide currency fluctuations.  Lululemon has not been as predictable on just how much it can beat earnings or raise guidance of late, but you wouldn’t know it with a fresh all-time high.  It seems like an easy observation to say that both companies will need to do very well when they report earnings on Thursday to keep profit takers from lightening up in these shares.

JON C. OGG