What to Expect When Lululemon Reports After the Close

Lululemon Athletica Inc. (NASDAQ: LULU) is scheduled to release its fiscal first-quarter financial results after the markets close on Wednesday. The consensus forecast is $0.70 in earnings per share (EPS) and $755 million in revenue. The same period of last year reportedly had $0.55 in EPS and $649.71 million in revenue.

In the fiscal fourth quarter, total comparable sales including direct sales to consumers, increased by 17% year over year on a constant dollar basis. Same-store sales rose 7% and direct-to-consumer sales rose 39% on a constant dollar basis.

It was implied in the fourth quarter that the massive jump in online sales is expected to continue in 2019, partly due to heavy investment and to the company’s introduction of clothing for men.

Store traffic, both online and in the brick-and-mortar world, was higher in the fourth quarter than in any other period last year, according to conference call comments from the company’s chief financial officer, P.J. Guido, who added, “So then coming into 2019, we’ll continue to fuel traffic, but we’ll also invest to improve conversion both online and in-store.”

Excluding Wednesday’s move, Lululemon had outperformed the broad markets, with its stock about 41% year to date. In the past 52 weeks, the stock was up closer to 40%.

A few analysts weighed in on Lululemon ahead of the report:

• Wedbush has a Hold rating with a $175 price target.
• B. Riley has a Neutral rating and a $165 price target.
• Macquarie has a Neutral rating.
• Oppenheimer has an Outperform rating with a $225 target.
• Credit Suisse has an Outperform rating and a $195 target price.

Shares of Lululemon traded down nearly 1% to $170.16 on Wednesday, in a 52-week range of $110.71 to $179.50. The consensus price target is $188.11.