Retail

What Analysts Are Saying About Lululemon After Earnings

When Lululemon Athletica Inc. (NASDAQ: LULU) reported its most recent financial results earlier this week, it topped estimates for its fiscal second quarter, but investors ultimately sent shares lower. It’s worth pointing out that analysts were fairly positive on the stock despite the pullback.

24/7 Wall St. has included some highlights from the earnings report, as well as what analysts were saying about the stock after the fact.

Lululemon said that it had $0.74 in earnings per share (EPS) and $902.9 million in revenue. That compared with consensus estimates of $0.55 in EPS on revenue of $842.49 million. In the same period of last year, the company reported EPS of $0.96 and $883.35 million in revenue.

Management noted that it was pleased with the overall results and the company’s increasing potential in the omnichannel. Management believes that 2020 is likely an inflection point for the company and retail in general.

The company noted that 492 of its 506 company-operated stores were open in the fiscal second quarter. Net revenue from company-operated stores decreased 51% year over year to $287.2 million.

Overall, revenues increased 2% year over year and 3% on a constant currency basis. Direct to consumer net revenue represented 61.4% of total net revenue, compared to 24.6% last year. Direct to consumer revenues increased 155% year over year to $554.3 million.

Here’s what analysts had to say:

  • Morgan Stanley reiterated an Equal Weight rating and raised its price target to $320 from $306.
  • UBS reiterated a Neutral rating and raised its price target from $300 to $326.
  • Deutsche Bank reiterated a Hold rating and lowered its target price to $298 from $341.
  • BMO Capital Markets reiterated it as Market Perform and raised its target to $228 from $192.
  • JPMorgan reiterated an Overweight rating and raised its target price to $387 from $380.
  • Guggenheim reiterated a Buy rating and raised its price target from $350 to $400.
  • Wedbush reiterated a Neutral rating and lowered its target price to $340 from $380.
  • Raymond James reiterated its Strong Buy rating and raised its target to $400 from $335.
  • BTIG Research reiterated a Buy rating and lowered its price target from $460 to $449.
  • Barclays reiterated an Overweight rating and raised its price target to $382 from $347.

Lululemon stock was trading below $320 on Friday, in a 52-week range of $128.85 to $399.90. The consensus price target is $373.13.