What to Expect From Lululemon Earnings

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Lululemon Athletica Inc. (NASDAQ: LULU) is set to report its fiscal second-quarter financial results after the markets close on Thursday. In 2016 this stock has been off to the races after delivering a strong first quarter, with an emphasis on sales and gross margin. Other major retailers and brand name clothiers that have reported recently have either won big or lost big, and considering the tailwinds that Lululemon has had this year, it might be in store for a monster report.

The consensus estimates from Thomson Reuters are $0.38 in earnings per share (EPS) on $515.47 million in revenue. The same period from last year reportedly had $0.34 in EPS on $453.01 million in revenue.

In the most recent earnings report, the company guided second-quarter diluted EPS in the range of $0.36 to $0.38 on revenues of $505 million to $515 million.

Over the past few years, this company had its share of problems, including see-through pant issues and quality control, and that crushed the valuations for the growth stock. But after bottoming out under $40 in 2014, this stock has apparently been the buy of a lifetime. Also the stock has hardly pulled back since the fall of 2015.

Recently Lululemon 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.

Prior to the release of the earnings report, a few analysts weighed in on the report:

  • D.A. Davidson reiterated a Neutral rating with an $80 price target.
  • Canaccord Genuity reiterated a Hold rating with a $70 price target.
  • MKM Partners reiterated a Buy rating and raised its price target to $90 from $82.
  • Credit Suisse reiterated an Outperform rating.
  • Oppenheimer reiterated an Outperform rating with a $90 price target.
  • Telsey Advisory Group has an Outperform rating and upped its price target to $92 from $82.
  • KeyCorp has an Overweight rating with an $89 price target.
  • Jefferies reiterated a Buy rating.
  • Citigroup has a Buy rating with an $89 price target.

So far in 2016, Lululemon has outperformed the broad markets, with the stock up nearly 46%. Over the past 52 weeks, the stock is up only 21%.

Shares of Lululemon closed Wednesday at $76.51, with a consensus analyst price target of $73.21 and a 52-week trading range of $43.14 to $81.81.

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