Lululemon Expected Strong First Quarter on Continued Consumer Demand for Specialty Apparel

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Lululemon (NASDAQ: LULU) is expected to announce first-quarter results on Thursday, June 2, after market close.

The EPS consensus estimate is $1.43 (+23.3% YoY) and the revenue consensus estimate is $1.55B (+26.0% YoY).

Over the past 2 years, LULU has exceeded EPS estimates 88% of the time and exceeded revenue estimates 75% of the time.

Over the past 3 months, EPS estimates have seen 18 upward and 2 downward revisions. Revenue estimates saw 16 upward revisions and 0 downward revisions.

Sportswear and lifestyle apparel maker LULU is expected to deliver another strong quarter.

Consumer demand for specialty apparel retailers such as LULU and peers VF Corp (VFC), Tapestry (TPR) and Burberry (OTCPK:BURBY) remained strong, helping to offset the impact of supply chain issues and inflation.

LULU stock gained nearly 10% in late March after posting a solid 32% increase in same-store sales in the fourth quarter of 2021.

VFC, TPR and BURBY also recently posted strong first quarter results and saw their shares rise.

On Thursday, LULU stock was upgraded to overweight from an equal weight at Morgan Stanley, on what the company called a compelling opportunity to buy a compound growth story from retail to a reduced valuation compared to historical brands.

Last month, B. Riley analyst Susan Anderson lowered LULU’s price target to $440 from $487. However, Anderson said fashion-exposed specialty retailers will likely have a chance to outperform in the first quarter as channel checks continued to show consumers are turning to fashions like dresses, workwear and swimwear. second-hand clothes with limited promotions.

Read a recent analysis on LULU from contributor SA Cavenagh Research: Lululemon: Premium Brand, Premium Priced

The SA Quant rating and the SA Authors rating on LULU are maintained, while the average Wall St. rating is Buy.

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