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."
Sign up for Kiplinger’s Free E-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
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Starlink is taking over the space market
The Kiplinger Letter Satellite broadband provider Starlink is taking over the space market. Amazon’s mega-constellation will soon join the fray, adding to the unprecedented disruption.
By John Miley Published
-
12 Steps to Protect Your Retirement Savings From Market Volatility
Even when the market ebbs and flows, you can keep your retirement investments stable with these proactive strategies.
By Kiplinger Advisor Collective Published
-
Four Common Misconceptions About Life Insurance
Just because you have no dependents and no debt doesn't mean life insurance wouldn't come in exceedingly handy for someone in your life or even a charity.
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS Published
-
Should You Keep Your 401(k) When You Retire?
Here are three primary reasons you might want to consider moving your retirement money from your 401(k) to an IRA once you retire.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
Want to Move to Italy? What to Consider Financially
Once you've decided that you and Italy are compatible, you'll want to work out your tax planning, investments, retirement accounts and benefits.
By Alex Ingrim, Chartered MCSI Published
-
Stock Market Today: Stocks Rise in Choppy Day for Markets
Moderna was the worst S&P 500 stock today after the vaccine maker slashed its R&D budget.
By Karee Venema Published
-
Will the Fed Cut Rates in September? Here's What Experts Predict
The race is already on to predict the trajectory of future reductions to borrowing costs.
By Dan Burrows Published
-
U.S. Dividend Payouts Accelerated in Q2, Led By Alphabet and Meta
Dividend payouts grew at an impressive rate in the second quarter, with Magnificent 7 stocks Alphabet and Meta helping fuel the increases.
By Joey Solitro Published
-
Microsoft Eliminates Another 650 Positions at Xbox Gaming
Microsoft stock is down slightly after announcing another round of layoffs in its Xbox gaming division. Here's what you need to know.
By Joey Solitro Published
-
Moderna Stock Plunges as Vaccine Maker Slashes R&D Budget: What to Know
Moderna stock is plunging Thursday after the COVID-19 vaccine maker announced plans to drastically cut its R&D spending to focus on new product approvals.
By Joey Solitro Published