On Thursday, September 1st, Lululemon (LULU) will release its Q2 2016 earnings results. The company is currently a Zacks Rank #3 (Hold) and shares are up about 49% year-to-date.
Dave will look into Lululemon’s past earnings, look at what is currently going on with the company, and gives us his thoughts on their upcoming earnings announcement.
Furthermore, Dave will look into some potential options trades for investors looking to make a play on Lululemon ahead of earnings.
Lululemon in Focus
Lululemon Athletica Inc. designs and retails athletic clothing for women, men, and female youth. Its apparel assortment, includes items such as fitness pants, shorts, tops and jackets, is designed for activities such as yoga, running and general fitness. The company also sells an array of accessories such as bags, yoga mats, and water bottles.
Lululemon met expectations in its Q1 2016 earnings report, posting an EPS that was equal to the Zacks Consensus Estimate.
LULU has an average EPS surprise of 0.21% for the last four quarters. In Q2, the company met our consensus estimate, posting EPS of $0.34. In Q3, LULU missed earnings expectations by 5.4%. In Q4 of 2015, Lululemon beat the Zacks Consensus Estimate by 6.25%.
Heading into this earnings report, our Most Accurate Estimate forLululemon is $0.38, the same as the Zacks Consensus Estimate.
When the company reported its Q1 earnings in June, it updated its fiscal year revenues guidance to a range between $2.305 billion and $2.345 billion, up from previous guidance calling for sales from $2.285 billion to $2.335 billion.
Last quarter, net sales grew by 17% compared to the first quarter of 2015 and quarterly comparable store sales grew by 5% on a constant dollar basis year-over-year. Going into this quarterly report, our Consensus estimates revenues of $514 million.
Credit Suisse (SIX:CSGN) recently reiterated an Outperform rating on Lululemon, citing their pricing strategy, normalized inventory levels, and supply-chain driven margin expansion. The firm currently has a $76 price target on LULU stock.
Lululemon’s stock performance has been stellar this year, and its near 50% gain has been driven by impressive sales growth. Top line growth will be crucial for the company as it goes into this earnings release.
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Dave Bartosiak is the editor of the Momentum Trader and Home Run Investor service. He has over a decade of experience in the financial services industry. He has traded forex, futures, stocks, and options. Mr. Bartosiak is a frequent guest on popular business news TV channels such as Bloomberg TV. He’s also the host of a light-hearted, Millennial-minded series of videos called “Trending Stocks.”
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
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