Athletic apparel retailer Lululemon (NASDAQ:LULU) will be reporting earnings tomorrow after market close. Here’s what to look for.
Lululemon beat analysts’ revenue expectations by 0.8% last quarter, reporting revenues of $3.61 billion, up 12.7% year on year. It was a mixed quarter for the company, with a solid beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
Is Lululemon a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Lululemon’s revenue to grow 7.2% year on year to $2.37 billion, slowing from the 10.4% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.60 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Lululemon has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1% on average.
Looking at Lululemon’s peers in the apparel retailer segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Urban Outfitters delivered year-on-year revenue growth of 10.7%, beating analysts’ expectations by 2.5%, and Gap reported revenues up 2.2%, topping estimates by 1.3%. Urban Outfitters traded up 23% following the results while Gap was down 20.1%.
Read our full analysis of Urban Outfitters’s results here and Gap’s results here.
There has been positive sentiment among investors in the apparel retailer segment, with share prices up 13.9% on average over the last month. Lululemon is up 24.1% during the same time and is heading into earnings with an average analyst price target of $334.95 (compared to the current share price of $335.95).
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
