Lululemon’s Q2 Earnings to Rise 60%, Revenue to Jump 50%

The Vancouver-based retailer healthy lifestyle-inspired athletic retailer Lululemon Athletica is expected to report its fiscal second-quarter earnings of $1.18 per share, which represents year-over-year growth of about 60% from $0.74 per share seen in the same period a year ago.

The apparel retailer would post year-over-year sales growth of about 50% to $1.34 billion.

“For second-quarter fiscal 2021, it expects net sales of $1.3-$1.33 billion, indicating a two-year CAGR growth of 21-23%. The company currently has 93% of its stores open. On a two-year CAGR basis, it expects flat in-store sales, whereas e-commerce sales are anticipated to increase 55%,” noted analysts at ZACKS Research.

“However, the company anticipates e-commerce sales in the fiscal second quarter to decline modestly from the prior-year quarter, as it laps the height of COVID-related channel shifts and online warehouse sales. Nonetheless, it expects e-commerce sales to increase modestly in the fiscal third and fourth quarters.”

Lululemon Athletica shares have surged over 11% so far this year. The stock closed nearly flat at $388.33 on Friday. The U.S. financial markets will be closed for Labor Day on Monday, September 6.

Analyst Comments

“Lululemon Athletica (LULU) is a LT topline grower, supported by compelling secular tailwinds (e.g., performance/athleisure focus), a market share gain opportunity, & credible future revenue driver (e.g., international expansion, digital growth, & product innovation/expansion into new categories). The company’s recent MIRROR acquisition offers both revenue & profitability upside, as reflected in our bull case,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“LULU dominates the NA athletic yoga apparel category due to its unique brand positioning & fashionable products. Covid accelerated consumers health & wellness focus & fashion casualization, both of which should benefit LULU.”

Lululemon Athletica Stock Price Forecast

Nine analysts who offered stock ratings for Lululemon Athletica in the last three months forecast the average price in 12 months of $441.00 with a high forecast of $466.00 and a low forecast of $405.00.

The average price target represents a 13.56% change from the last price of $388.33. From those nine analysts, eight rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $300 with a high of $521 under a bull scenario and $213 under the worst-case scenario. The firm gave an “Equal-weight” rating to the athletic apparel company’s stock.

Several other analysts have also updated their stock outlook. B.Riley raised the target price to $466 from $370. Telsey Advisory Group lifted the target price to $460 from $440. Deutsche Bank upped the price target to $436 from $401.

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