Q4 Preview: Lululemon (LULU) Should Meet Expectations; Investors Eye Outlook
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Price: $119.91 +3.65%
Rating Summary:
13 Buy, 34 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
13 Buy, 34 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Lululemon Athletica (Nasdaq: LULU) is looking fit Wednesday afternoon heading into its fourth-quarter report, expected out before the market opens Thursday.
Currently, the Street is looking earnings of 49 cents per share and revs of $362.2 million. For the same period last year, lululemon reported EPS of 64 cents and revs of $239 million.
Earlier in January, lululemon raised its fourth-quarter outlook. EPS expectations moved from a range of 40 to 42 cents to 47 to 49 cents, versus the consensus of 42 cents. Sales move from $327 million to $332 million to $358 to $363 million, which compares to the Street estimate of $334.5 million.
Shares of lululemon rose 11.8 percent through the quarter to $63.13 at the end of January. The stock is up 17.5 percent since then and actually 59 percent better for 2012.
Overall, Bloomberg data shows 13 analysts with a Buy rating on lululemon, nine at Hold, and one with a Sell. The average price target is $69, with a range of $49 to $80. Lululemon has traded within a range of $37.51 to $74.50 over the last 52-week time frame.
Into the numbers, firm D.A. Davidson (DAD) said it see revs of $363 million, comps at 23.3 percent, and EPS of 49 cents. The outlook assumes gross margins drop 196 basis points from the same period last year to 56.5 percent, 32 percent of SG&A growth, and 145 basis points of operating margin expansion to 30.5 percent.
Tailwinds DAD highlights for lululemon's comps include: "1) growing consumer interest in the brand, 2) differentiated new product featuring brighter colors and enhanced finishes, 3) improved inventory position versus 2011 and 4) a large class of second year stores entering the comp base which are still reaching mature store productivity levels."
DAD also thinks lululemon will issue conservative guidance for fiscal 2012, but cautions: "If it is considered merely conservative in nature, the stock will be fine. If investors feel there is credibility to guidance (particularly margin guidance), it could weigh on shares. Although the business could easily support 30% margins given comp trends and store productivity, we expect brand building investments keep a lid on margin expansion."
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Lululemon's past performance at Streetinsider's Lululemon's Income Statement.
Currently, the Street is looking earnings of 49 cents per share and revs of $362.2 million. For the same period last year, lululemon reported EPS of 64 cents and revs of $239 million.
Earlier in January, lululemon raised its fourth-quarter outlook. EPS expectations moved from a range of 40 to 42 cents to 47 to 49 cents, versus the consensus of 42 cents. Sales move from $327 million to $332 million to $358 to $363 million, which compares to the Street estimate of $334.5 million.
Shares of lululemon rose 11.8 percent through the quarter to $63.13 at the end of January. The stock is up 17.5 percent since then and actually 59 percent better for 2012.
Overall, Bloomberg data shows 13 analysts with a Buy rating on lululemon, nine at Hold, and one with a Sell. The average price target is $69, with a range of $49 to $80. Lululemon has traded within a range of $37.51 to $74.50 over the last 52-week time frame.
Into the numbers, firm D.A. Davidson (DAD) said it see revs of $363 million, comps at 23.3 percent, and EPS of 49 cents. The outlook assumes gross margins drop 196 basis points from the same period last year to 56.5 percent, 32 percent of SG&A growth, and 145 basis points of operating margin expansion to 30.5 percent.
Tailwinds DAD highlights for lululemon's comps include: "1) growing consumer interest in the brand, 2) differentiated new product featuring brighter colors and enhanced finishes, 3) improved inventory position versus 2011 and 4) a large class of second year stores entering the comp base which are still reaching mature store productivity levels."
DAD also thinks lululemon will issue conservative guidance for fiscal 2012, but cautions: "If it is considered merely conservative in nature, the stock will be fine. If investors feel there is credibility to guidance (particularly margin guidance), it could weigh on shares. Although the business could easily support 30% margins given comp trends and store productivity, we expect brand building investments keep a lid on margin expansion."
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Lululemon's past performance at Streetinsider's Lululemon's Income Statement.
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