Retail

What to Expect From Lululemon Earnings

Chris Lange

Published: June 7, 2016 9:55 am

Last Updated: January 13, 2020 7:06 am

Lululemon Athletica Inc. (NASDAQ: LULU) is set to report its fiscal first-quarter financial results before the markets open on Wednesday. The Thomson Reuters consensus estimates are $0.31 in earnings per share (EPS) on $487.72 million in revenue. In the same period of the previous year, the company reported EPS of $0.34 and $423.54 million in revenue.

This company topped the list of the top 10 sporting goods stores where shoppers spend the most per trip, with an incredible $100 per trip on average. Lululemon’s spot at the top is not a big surprise. After all, a pair of yoga pants costs about $100 and that’s probably what most shoppers go to the store for.

This company had a very solid March and first quarter, and the second quarter looks to be off and running as well.

Looking at the past quarter, total comparable sales for the quarter, including direct sales to consumers, increased by 11% year over year on a constant dollar basis. Same-store sales rose 5% and direct to consumer sales rose 33%, also on a constant dollar basis. Direct to consumer sales now make up 20.8% of Lululemon’s total sales, up from 19% in the same period last year.

At the rate that Lululemon is going we could expect another strong quarter.

A few analysts weighed in on Lululemon prior to the release of the earnings report:

• Sterne Agee CRT reiterated a Buy rating with a $75 price target.
• Morgan Stanley reiterated an Outperform rating with a $71 price target.
• Credit Suisse reiterated a Buy rating.
• MKM Partners reiterated a Buy rating with a $77 price target.
• Merrill Lynch reiterated an Underperform rating with a $50 price target.
• FBR reiterated an Underperform rating with a $40 price target.

So far in 2016, Lululemon has outperformed the broad markets, with the stock up 31%. Over the past 52 weeks, the stock is up only about 8%.

Shares of Lululemon were trading down 1.5% at $67.69 on Tuesday, with a consensus analyst price target of $69.45 and a 52-week trading range of $43.14 to $69.73.