What to Expect From Lululemon Earnings

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.

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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%.

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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.