What to Expect From Lululemon’s Q1 Earnings Report on Thursday

The Vancouver-based retailer healthy lifestyle-inspired athletic retailer Lululemon is expected to report its fiscal first-quarter earnings of $0.90 per share, which represents year-over-year growth of over 309% from $0.22 per share seen in the same period a year ago.

The apparel retailer would post year-over-year revenue growth of over 70% to $1.12 billion. In the last four quarters, on average, Lululemon has beaten earnings estimates by over 13%.

The company is expected to report earnings after market close on Thursday, June 3. Lululemon shares fell over 7% so far this year.

Analyst Comments

“Revenue & GM upside could yield a 16c 1Q21 EPS beat vs. the Street. While 1Q21 beats & raises haven’t been enough to send most Softline retailers’ shares higher, Lululemon (LULU) may be an exception as investors move up the quality curve. Trim PT to $377 on an updated WACC; raise 1Q21 EPS on better sales,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.

“We raise our 1Q21 EPS expectation to 92c from 90c prior on an improved revenue forecast, slightly offset by higher SG&A expense. But we see room for revenue & GM-driven upside, which could push 1Q21 EPS to $1.06. We raise our 1Q21 revenue estimate above the high end of guidance on better-than-expected, more durable 1Q21 eCommerce revenue strength exhibited by LULU’s specialty retail counterparts. However, we still see room for upside, as our revenue forecast assumes a 21% 2Y CAGR vs. 4Q20 +24% y/y & 3Q20 +22% y/y. If we were to assume revenue remains at the 24% 2Y CAGR level delivered in 4Q20, 1Q21 topline could be as high as $1.2B. This would add 4c to our EPS estimate, resulting in 96c EPS.”

Lululemon Stock Price Forecast

Fifteen analysts who offered stock ratings for Lululemon in the last three months forecast the average price in 12 months of $397.33 with a high forecast of $465.00 and a low forecast of $330.00.

The average price target represents a 22.96% increase from the last price of $323.13. Of those 15 analysts, 12 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley slashed the stock price forecast to $377 from $394 with a high of $476 under a bull scenario and $138 under the worst-case scenario. The firm gave an “Equal-weight” rating on the athletic apparel company’s stock.

Several other analysts have also updated their stock outlook. Piper Sandler decreased their target price to $478 from $490 and set an “overweight” rating. TheStreet downgraded from a “b” rating to a “c+” rating.

Cowen reduced their price objective to $389 from $409 and set an “outperform” rating. Robert W. Baird reduced their price objective to $395 from $425and set an “outperform” rating.

Check out FX Empire’s earnings calendar