Lululemon Athletica (LULU) stock is trading higher Thursday after the athletic apparel retailer beat top- and bottom-line expectations for its fiscal first quarter and announced a $1 billion increase to its share repurchase program.
In the quarter ended April 28, Lululemon said its net revenue increased 10.4% year-over-year to $2.2 billion, driven by a 35% rise in international net revenues. Additionally, LULU disclosed n 11.4% jump in earnings to $2.54 per share.
"In the first quarter, we saw strong momentum in our international markets, demonstrating how our brand continues to resonate around the world," Lululemon CEO Calvin McDonald said in a statement. "Guests responded well to our product innovations across categories, and we are pleased by the progress we are making to optimize our U.S. product assortment."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results came in ahead of analysts’ expectations. According to Yahoo Finance, Wall Street was anticipating revenue of $2.19 billion and earnings of $2.38 per share.
For the second quarter, Lululemon said it expects net revenue in the range of $2.4 billion to $2.42 billion and EPS to arrive between $2.92 to $2.97. This is slightly below the $2.45 billion in revenue and $3.01 in earnings per share analysts' are projecting.
For the full year, LULU said it continues to expect net revenue in the range of $10.7 billion to $10.8 billion. However, it now expects earnings to arrive between $14.27 to $14.47 per share, up from its previous range of $14 to $14.20.
Lululemon also said its board of directions approved a $1 billion increase to its stock buyback program, bringing the total remaining to $1.7 billion, or 4.2% of its current market cap.
Stock repurchases, also known as buybacks, are another way for corporations to boost value for shareholders. As Kiplinger contributor Mark Hake explains in his piece on "What Is a Stock Buyback," a company "that buys back its shares will produce a higher stock price because as its shares count falls, it forces the price higher."
Hake goes on to explain "that effect produces more value for shareholders, as they pay no taxes on this unrealized gain (until they sell shares)."
Is Lululemon stock a buy, sell or hold?
The consumer discretionary stock is down more than 38% for the year to date, but analysts remain upbeat. According to S&P Global Market Intelligence, the consensus analyst target price for LULU stock is $405.47, representing implied upside of more than 30% to current levels. Meanwhile, the consensus recommendation is a Buy.
CFRA Research analyst Zachary Warring maintained a Strong Buy on LULU stock after the earnings release.
"Although the company is experiencing growth deceleration in the Americas, we continue to believe LULU is the top player in apparel retail and expect an acceleration in growth across the Americas and continued success in China (+45% in Q1) and internationally," Warring wrote in a note to clients.
The analyst has a $435 price target on LULU stock, representing implied upside of nearly 40% to current levels.
Related Content
-
What to expect from the global economy in 2026The Kiplinger Letter Economic growth across the globe will be highly uneven, with some major economies accelerating while others hit the brakes.
-
What You Need to Do With Your 401(k) Before 2025 Is OverBefore 2025 ends, check your 401(k) contributions, investments, and catch-up eligibility to lock in this year’s tax savings and employer match.
-
3 Year-End Tax Moves You Can't Afford to MissDon't miss out on this prime time to maximize contributions to your retirement accounts, do Roth conversions and capture investment gains.
-
I'm a Tax Attorney: These Are the Year-End Tax Moves You Can't Afford to Miss
Don't miss out on this prime time to maximize contributions to your retirement accounts, do Roth conversions and capture investment gains.
-
I'm an Investment Adviser: This Is the Tax Diversification Strategy You Need for Your Retirement IncomeSpreading savings across three "tax buckets" — pretax, Roth and taxable — can help give retirees the flexibility to control when and how much taxes they pay.
-
Dow Rises 497 Points on December Rate Cut: Stock Market TodayThe basic questions for market participants and policymakers remain the same after a widely expected Fed rate cut.
-
Could an Annuity Be Your Retirement Safety Net? 4 Key ConsiderationsMore people are considering annuities to achieve tax-deferred growth and guaranteed income, but deciding if they are right for you depends on these key factors.
-
I'm a Financial Pro: Older Taxpayers Really Won't Want to Miss Out on This Hefty (Temporary) Tax BreakIf you're age 65 or older, you can claim a "bonus" tax deduction of up to $6,000 through 2028 that can be stacked on top of other deductions.
-
JPMorgan's Drop Drags on the Dow: Stock Market TodaySmall-cap stocks outperformed Tuesday on expectations that the Fed will cut interest rates on Wednesday.
-
Meet the World's Unluckiest — Not to Mention Entitled — Porch PirateThis teen swiped a booby-trapped package that showered him with glitter, and then he hurt his wrist while fleeing. This is why no lawyer will represent him.
-
Smart Business: How Community Engagement Can Help Fuel GrowthAs a financial professional, you can strengthen your brand while making a difference in your community. See how these pros turned community spirit into growth.
