Lululemon Stock's Price Troubles Continue After Earnings
Lululemon stock is lower Friday after the company's second-quarter revenue came up short and it cut its full-year outlook.
Lululemon Athletica (LULU) stock is trading lower Friday after the athleisure apparel company reported second-quarter results that were mixed compared with analysts' expectations and lowered its full-year outlook.
In the quarter ended July 28, Lululemon's revenue increased 7.3% year-over-year to $2.37 billion, driven by a 29% pop in international sales. Its earnings per share (EPS) were up 17.5% from the year-ago period to $3.15.
"In the second quarter, Lululemon delivered revenue and earnings growth, with ongoing strength across our international business," said Lululemon CEO Calvin McDonald in a statement. "In the U.S., our teams continue to optimize our product assortment and remain focused on driving forward our opportunities in the market."
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 were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $2.41 billion and earnings of $2.93 per share, according to CNBC.
As a result of "uncertainties in the macro environment," as management mentioned in the earnings call, Lululemon slashed its full-year outlook. The company now anticipates revenue in the range of $10.375 billion to $10.475 billion and earnings per share of $13.95 to $14.15. It had previously forecast revenue to arrive between $10.7 billion to $10.8 billion and EPS of $14.27 to $14.47.
For the third quarter, Lululemon said it is guiding for revenue of $2.34 billion to $2.365 billion and earnings per share in the range of $2.68 to $2.73.
Is Lululemon stock a buy, sell or hold?
Lululemon Athletica has vastly underperformed the broad market in 2024, down 50% for the year to date vs the S&P 500's 18% gain. But Wall Street remains bullish on the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for LULU stock is $322.20, representing implied upside of more than 25% to current levels. Meanwhile, the consensus recommendation is a Buy.
Financial services firm Stifel is one of the more bullish outfits on LULU stock with a Buy rating and $370 price target.
"We see LULU uniquely positioned at the intersection of secular trends and believe international growth contribution is under-appreciated in shares," says Stifel analyst Jim Duffy. The analyst anticipates "multiple years of mid-teens plus revenue growth and margin expansion," which he believes will be complemented by stock buybacks.
"While [the] risk/reward assessment presumes ongoing strength, the bias remains to the upside, and we continue to view LULU shares as a solid core holding for growth investors," Duffy adds.
Related Content
-
Why Some Michigan Tax Refunds Are Taking Longer Than Usual This YearState Taxes If your Michigan tax refund hasn’t arrived, you’re not alone. Here’s what "pending manual review" means and how to verify your identity if needed.
-
If You'd Put $1,000 Into Caterpillar Stock 20 Years Ago, Here's What You'd Have TodayCaterpillar stock has been a remarkably resilient market beater for a very long time.
-
Good Stock Picking Gives This Primecap Odyssey Fund a LiftOutsize exposure to an outperforming tech stock and a pair of drugmakers have boosted recent returns for the Primecap Odyssey Growth Fund.
-
If You'd Put $1,000 Into Caterpillar Stock 20 Years Ago, Here's What You'd Have Today
Caterpillar stock has been a remarkably resilient market beater for a very long time.
-
Good Stock Picking Gives This Primecap Odyssey Fund a Lift
Outsize exposure to an outperforming tech stock and a pair of drugmakers have boosted recent returns for the Primecap Odyssey Growth Fund.
-
More Tools to Build a Bond LadderVanguard aims to launch a line of target-maturity corporate bond ETFs.
-
A Newly Retired Couple With a Portfolio Full of Winners Faced a $50,000 Tax Bill: This Is the Strategy That Helped Save ThemLarge unrealized capital gains can create a serious tax headache for retirees with a successful portfolio. A tax-aware long-short strategy can help.
-
5 Retirement Myths to Leave Behind (and How to Start Planning for the Reality)Separating facts from fiction is an important first step toward building a retirement plan that's grounded in reality and not based on incorrect assumptions.
-
I'm a Financial Adviser: Silence Is Golden, But It Hurts Your Heirs More Than You ThinkTalking to heirs about transferring wealth can be overwhelming, but avoiding it now can lead to conflict later. Here's how to start sharing your plans.
-
Dow Dives 521 Points as Goldman, AmEx Slide: Stock Market TodayNews of Block's massive layoffs exacerbated AI worries across the financial sector.
-
The Merger Market is Heating Up. Here's How to Cash InInvesting in takeover deals can be a low-volatility way to diversify your portfolio.
