Retail

Are Lululemon Earnings Enough for Investors?

Lululemon Athletica Inc. (NASDAQ: LULU) released fiscal third-quarter financial results after markets closed Wednesday. The company said that it had $0.96 in earnings per share (EPS) and $916 million in revenue, compared with consensus estimates that called for $0.93 in EPS and $899.66 million in revenue. The same period of last year reportedly had $0.75 in EPS and $747.66 million in revenue.

Overall, revenues increased 23% year over year and 23% on a constant currency basis. Direct to consumer net revenue represented 26.9% of total net revenue, compared to 25.3% last year.

Total comparable sales increased 16% from last year, or up 17% in constant currency. Comparable store sales increased by 10%, while direct to consumer net revenue increased by 11%.

Looking ahead to the fiscal fourth quarter, the company expects to see EPS in the range of $2.10 to $2.13 and revenue between $1.315 billion and $1.330 billion. Consensus estimates are calling for $2.13 in EPS and $1.32 billion in revenue for the quarter.

CEO Calvin McDonald commented:

We’re proud of the continued momentum in our business as we live into our vision to be an experiential brand. We are successfully executing on our Power of Three growth plan as we create authentic connections with new and existing guests around the world. I’d like to thank our amazing teams for achieving this strong level of performance.

Shares of Lululemon closed Wednesday at $233.19, in a 52-week range of $110.71 to $233.53. The consensus price target is $229.15. Following the announcement, the stock was initially down about 5% at $222.00 in the after-hours trading session.

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