lululemon athletica inc. (LULU) is likely to witness top and bottom-line growth when it reports first-quarter fiscal 2025 results on June 5, after market close. The Zacks Consensus Estimate for fiscal first-quarter sales is pegged at $2.35 billion, indicating a 6.6% increase from the year-ago quarter's reported figure.The consensus estimate for the company's fiscal fourth-quarter earnings is pegged at $2.58 per share, suggesting 1.6% growth from the year-ago quarter’s actual. Earnings estimates have been un ...

In the latest market close, Lululemon (LULU) reached $315.75, with a -1.7% movement compared to the previous day. The stock fell short of the S&P 500, which registered a loss of 0.56% for the day. On the other hand, the Dow registered a loss of 0.58%, and the technology-centric Nasdaq decreased by 0.51%.Shares of the athletic apparel maker witnessed a gain of 18.41% over the previous month, beating the performance of the Consumer Discretionary sector with its gain of 10.54% and the S&P 500's gain of 7.37%.T ...

Group 1: TJX Companies Inc - TJX stock is currently down 2.4% at $131.75 despite better-than-expected first-quarter earnings and reaffirmed fiscal 2026 guidance [2] - Historically, TJX has underperformed during Memorial Day week, finishing higher only three times in the past decade with an average decline of 1% [3] - A similar performance this year could see the stock drop to just above $130, retreating from a record high of $135.85, although it has gained 8.8% in 2025 [3] Group 2: Lululemon Athletica Inc - Lululemon stock is showing seasonal strength, currently at $325.64, and has the potential to recover from a 14.7% year-to-date deficit [4] - It is one of the top five Memorial Day week performers among S&P 500 stocks, finishing higher eight out of the last ten years with an average gain of 4.8% [5] - A repeat of past performance could push Lululemon's stock to $341.27, a level not seen since late March [5]

Core Viewpoint - The article discusses the reliability of Wall Street analysts' recommendations, particularly focusing on Lululemon (LULU), and highlights the potential misalignment of interests between brokerage firms and retail investors [1][5]. Brokerage Recommendations - Lululemon has an average brokerage recommendation (ABR) of 1.98, indicating a position between Strong Buy and Buy, based on recommendations from 31 brokerage firms [2]. - Out of the 31 recommendations, 16 are Strong Buy and 2 are Buy, which account for 51.6% and 6.5% of all recommendations respectively [2]. Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations for investment decisions may not be advisable, as studies suggest they have limited success in guiding investors towards stocks with high price appreciation potential [5]. - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, issuing five "Strong Buy" recommendations for every "Strong Sell" [6][10]. Zacks Rank as an Alternative - The Zacks Rank, a proprietary stock rating tool, categorizes stocks from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) and is considered an effective indicator of near-term stock price performance [8][11]. - The Zacks Rank is based on earnings estimate revisions, which are strongly correlated with stock price movements, providing a more timely and balanced assessment compared to the ABR [11][12]. Current Earnings Estimates for Lululemon - The Zacks Consensus Estimate for Lululemon's earnings for the current year remains unchanged at $14.91, indicating steady analyst views on the company's earnings prospects [13]. - Due to the unchanged consensus estimate and other factors, Lululemon holds a Zacks Rank 3 (Hold), suggesting caution despite the Buy-equivalent ABR [14].

Company Performance - Lululemon's stock closed at $278.55, reflecting a +0.43% change from the previous day, outperforming the S&P 500's loss of 0.64% [1] - The stock has increased by 5.18% over the past month, surpassing the Consumer Discretionary sector's gain of 2.21% and the S&P 500's gain of 0.38% [1] Earnings Forecast - Lululemon is expected to report an EPS of $2.60, representing a 2.36% increase from the same quarter last year [2] - Revenue is forecasted to be $2.35 billion, indicating a 6.57% growth compared to the corresponding quarter of the prior year [2] Full-Year Estimates - The full-year Zacks Consensus Estimates predict earnings of $14.91 per share and revenue of $11.19 billion, reflecting year-over-year changes of +1.84% and +5.69%, respectively [3] - Recent changes in analyst estimates for Lululemon may indicate shifts in near-term business trends, with positive revisions seen as a favorable sign for the company's outlook [3] Valuation Metrics - Lululemon's Forward P/E ratio is currently 18.61, which is a premium compared to its industry's Forward P/E of 13.05 [6] - The company has a PEG ratio of 2.34, while the average PEG ratio for Textile - Apparel stocks is 1.53 [6] Industry Context - The Textile - Apparel industry is part of the Consumer Discretionary sector and holds a Zacks Industry Rank of 163, placing it in the bottom 35% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1 - The article highlights Lululemon Athletica Inc (NASDAQ:LULU) as a stock to avoid in May, based on historical performance data [1][2] - Over the past decade, LULU has averaged a loss of 2.8% in May, finishing lower 80% of the time [2] - In 2025, LULU has experienced a significant decline of 27%, with current trading around $279.46 after attempting to rebound from a low of $234.84 [3] Group 2 - The stock has seen a high call/put volume ratio of 1.79, indicating bullish sentiment, but also leaves room for bearish movements if this sentiment changes [4] - LULU's Schaeffer's Volatility Index (SVI) is at 41%, which is in the 23rd percentile of its annual range, suggesting options are currently affordable [4]

Company Performance - Lululemon athletica inc. (LULU) stock has declined by 4.2% over the past month, primarily due to expectations of higher expenses and uncertainty from increased tariffs on imports from China and Mexico [1][15] - The stock's performance is below the broader sector's growth of 0.2% and the S&P 500 index's decline of 1.2%, but it has outperformed the Textile - Apparel industry's decline of 5.6% [2] Valuation Metrics - LULU's current share price is $271.27, reflecting a 20% premium to its 52-week low of $226.01 and a 35.9% discount from its 52-week high of $423.32 [6] - The forward 12-month price-to-earnings (P/E) multiple is 17.88X, significantly higher than the Zacks Textile - Apparel industry average of 10.44X, indicating a relatively expensive valuation [8][10] - The price-to-sales (P/S) ratio stands at 2.86X, above the industry's 1.63X, contributing to investor unease [9] Earnings Outlook - For the first quarter of fiscal 2025, Lululemon anticipates flat year-over-year gross margins, with operating margins projected to decline by 120 basis points due to increased expenses [16][19] - The company forecasts fiscal 2025 EPS between $14.95 and $15.15, reflecting a rise from $14.64 in fiscal 2024, despite currency headwinds expected to reduce EPS by 30-35 cents [19] Growth Strategy - Lululemon's Power of Three X2 growth plan aims for a total net revenue CAGR of 15% from 2021 to 2026, targeting $12.5 billion in net revenues by 2026 [14][23] - The company is focusing on expanding its international presence, particularly in key markets like Mainland China, and aims for international revenues to account for nearly 50% of total sales by the end of 2026 [22] Investor Sentiment - Despite a strong performance last quarter, investor sentiment remains cautious due to rising tariffs and unfavorable currency exchange rates, reflected in a downtrend in earnings estimates [15][20] - The Zacks Consensus Estimate for LULU's fiscal 2025 and 2026 earnings per share has declined by 2% and 1.6%, respectively, indicating skepticism about the company's near-term growth potential [20]

Group 1 - Lululemon is recognized as a well-run company, successfully avoiding strategic mistakes made by competitors like Adidas and Nike [1] - The company is still in the early stages of brand expansion, indicating potential for future growth [1] - Expected growth is anticipated from international markets and the men's segment [1]

Group 1 - The article discusses the investment strategy of a family office fund led by Amrita, focusing on sustainable, growth-driven companies that aim to maximize shareholder equity [1] - Amrita has a background in high-growth supply-chain start-ups and has experience working with venture capital firms, which has contributed to her investment acumen [1] - The newsletter "The Pragmatic Optimist" aims to simplify financial literacy and macroeconomic concepts for a broader audience, enhancing understanding of investment strategies [1] Group 2 - The analyst has a long position in lululemon athletica (LULU), indicating a positive outlook on the stock despite previous downgrades to a "hold" rating [2] - The article emphasizes that past performance does not guarantee future results, highlighting the inherent uncertainties in investment [3]

Group 1 - The article mentions that Parkev Tatevosian, CFA, has no position in any of the stocks mentioned [1] - The Motley Fool has positions in and recommends Lululemon Athletica Inc [1] - Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services [1]