Shares of Lululemon Athletica Inc (LULU.US) are gaining nearly 7.5% ahead of the opening of today's session on Wall Street after the athletic apparel company raised its earnings per share guidance for the year and reported a first-quarter profit that exceeded analysts' expectations. What's more, the company's board approved a $1 billion share repurchase program.
Oppenheimer analysts communicated that while recent trends do not give Lululemon lasting clarity on the rebound in consumer demand this, the data suggests that sales trends have stabilized after a slow start to 2024. Analysts are also encouraged by management's comments suggesting an increase in product innovation for the remainder of the year.
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SECOND QUARTER OUTLOOK
- Net revenues of $2.4 billion to $2.42 billion, estimated $2.46 billion
- Earnings per share $2.92 to $2.97, estimated $3.04
2025 FORECAST
- Projected EPS of $14.27 to $14.47, previously estimated $14 to $14.20, analysts estimated $14.17
- Net revenues of $10.7 billion to $10.8 billion, analysts estimated $10.76 billion
FIRST QUARTER RESULTS
- EPS (earnings per share) $2.54 vs. $2.28 y/y, estimates $2.39
- Net revenues $2.21 billion, +10% y/y, estimates $2.2 billion
- Total sales in constant currency +7%, estimates +7.8%
- Gross margin 57.7% vs. 57.5% y/y, estimates 57.5%
- Operating margin 19.6% vs. 20.1% y/y, estimates 18.9%
- Inventory $1.35 billion, estimate $1.51 billion
- Total number of locations 711 vs. 711 q/q, forecast 713.63
OTHER COMMENTS
- In Q1 2024, the company repurchased 0.8 million common shares for $296.9 million.
The company's current valuation based on the forward PE ratio ranks it within -2 standard deviations of the quotation range of the 4-year average. Source: Bloomberg Financial LP
Pre-opening quotes indicate that LULU will gain nearly 7.5% at the start of the Wall Street session. Source: xStation
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