What Investors Need To Know About Lululemon (LULU) Stock Before Q2 Earnings

Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into everything investors need to know about Lululemon (NASDAQ:LULU) stock before the company reports its Q2 earnings results on Thursday. The yoga and athleisure retailer looks impressive as it expands its business to further challenge everyone from Nike (NYSE:NKE) to Adidas (OTC:ADDYY) .

Overall, the second quarter earnings season has been a mixed bag for retailers. Department stores such as Nordstrom (NYSE:JWN) and Macy’s (NYSE:M) have failed to inspire much investor confidence. Meanwhile, Walmart (NYSE:WMT) and Target (NYSE:TGT) continued to show they can thrive in the Amazon (NASDAQ:AMZN) age.

Moving on, Lululemon’s rise helped push the rest of the industry from Nike to Gap (NYSE:GPS) and L Brands’ (NYSE:LB) Victoria’s Secret to all roll out more yoga-focused and athleisure offerings. On top of that, the Vancouver, Canada-based company has expanded its menswear unit, introduced self-care products, and rolled out more outwear to better compete with the likes of Canada Goose (NYSE:GOOS) and The North Face (NYSE:VFC) .

Going forward, Lululemon plans to extend its international push as it tries to expand beyond North America and Australia/New Zealand deeper into Asia and Europe. LULU is also currently testing a membership program and opened a massive new “experiential” store in Chicago. Furthermore, Lululemon has bolstered its e-commerce and digital business.

Looking ahead, our current Zacks Consensus Estimates call for the firm’s Q2 revenue and earnings to climb 16.7% and 25.4%, respectively. This would represent a slowdown from the first quarter’s expansion, but still looks strong historically speaking.

Despite its strong 2019, LULU stock rests roughly 7% below its 52-week highs and is a Zacks Rank #3 (Hold) at the moment. Lululemon is scheduled to release its Q2 fiscal 2019 financial results after the closing bell on Thursday, September 5. So, make sure to come back to Zacks for a full break down then.

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