Company Overview - Lululemon (LULU) closed at $402.90, with a daily increase of +0.72%, outperforming the S&P 500's loss of 1.46% on the same day [1] - Over the past month, Lululemon shares have gained 3.46%, while the Consumer Discretionary sector increased by 0.19% and the S&P 500 by 1.08% [1] Upcoming Earnings - The upcoming earnings per share (EPS) for Lululemon is projected at $5.82, indicating a 10.02% increase year-over-year [2] - Revenue is expected to reach $3.57 billion, reflecting an 11.49% increase compared to the same quarter last year [2] Full Year Projections - For the full year, earnings are projected at $14.36 per share, a +12.45% change from the previous year, with revenue estimated at $10.55 billion, showing a +9.66% increase [3] - Recent shifts in analyst projections are important, as positive revisions indicate optimism regarding the company's business and profitability [3] Stock Performance Metrics - The Zacks Rank system, which assesses estimate changes, currently ranks Lululemon at 2 (Buy), with a historical average annual return of +25% for 1 stocks since 1988 [5] - Over the last 30 days, the Zacks Consensus EPS estimate has increased by 1.35% [5] Valuation Metrics - Lululemon has a Forward P/E ratio of 27.86, which is a premium compared to the industry average of 16.18 [6] - The PEG ratio for Lululemon is currently 2.61, while the average PEG ratio for the Textile - Apparel industry is 1.89 [6] Industry Context - The Textile - Apparel industry is part of the Consumer Discretionary sector, holding a Zacks Industry Rank of 50, placing it in the top 20% 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]

Core Viewpoint - lululemon athletica inc. (LULU) has experienced a 4% decline in share price despite raising its revenue and earnings guidance for Q4 fiscal 2024, attributed to strong holiday demand [1] Financial Performance - LULU's shares have increased by 28% over the past three months, outperforming the broader industry growth of 16.3% and the Consumer Discretionary sector's rise of 7.6% [2] - The current share price of $382.82 represents a 22.1% discount from its 52-week high of $491.30 and a 69.4% premium over its 52-week low of $226.01 [5] - LULU expects Q4 fiscal 2024 revenues to grow by 11-12%, reaching $3.56-$3.58 billion, an increase from the previous forecast of $3.48-$3.51 billion [7] - The company projects fiscal Q4 earnings per share (EPS) between $5.81 and $5.85, up from the earlier estimate of $5.56 to $5.64 [8] - A 30 basis points increase in gross margin is anticipated compared to Q4 fiscal 2023, a notable improvement from the prior guidance of a 20-30 basis points decrease [9] Earnings Estimates - The Zacks Consensus Estimate for LULU's fiscal 2024 and 2025 EPS has increased by 0.4% and 0.5%, respectively, indicating a bullish outlook [10] - The consensus estimate for fiscal 2024 sales and EPS implies year-over-year growth of 9.6% and 12.3%, respectively [11] Long-Term Growth Strategy - LULU's Power of Three X2 growth strategy aims to quadruple international net revenues from 2021 levels and double digital and menswear sales [14] - The company estimates net revenues of $12.5 billion by 2026, significantly up from the 2021 reported figure of $6.25 billion [14] - LULU's strong brand positioning and commitment to high-performance athletic apparel contribute to its competitive advantage [15] - Successful global expansion, particularly in markets like China, has enhanced brand acceptance and customer connection [16] Investment Outlook - LULU's strong holiday results and positive fiscal 2024 outlook inspire investor optimism, positioning the company as an attractive long-term investment [17]

Core Viewpoint - Lululemon's stock has underperformed compared to the S&P 500 and the textile-apparel industry, raising questions about its near-term performance [1] Earnings Estimate Revisions - Lululemon is expected to report earnings of $5.81 per share for the current quarter, reflecting a year-over-year increase of +9.8% [4] - The consensus earnings estimate for the current fiscal year is $14.34, indicating a year-over-year change of +12.3% [4] - For the next fiscal year, the earnings estimate is $15.30, representing a +6.7% change from the previous year [5] - The Zacks Rank for Lululemon is 2 (Buy), indicating a positive outlook based on earnings estimate revisions [6] Revenue Growth - The consensus sales estimate for the current quarter is $3.57 billion, showing a year-over-year increase of +11.3% [8] - For the current fiscal year, the sales estimate is $10.54 billion, indicating a +9.6% change, while the next fiscal year's estimate is $11.32 billion, reflecting a +7.4% change [8] Last Reported Results and Surprise History - Lululemon reported revenues of $2.4 billion in the last quarter, a year-over-year increase of +8.7% [9] - The EPS for the last quarter was $2.87, compared to $2.53 a year ago, with a surprise of +6.69% [10] - The company has consistently beaten consensus EPS estimates in the last four quarters and topped revenue estimates three times [10] Valuation - Lululemon has a Zacks Value Style Score of D, indicating it is trading at a premium compared to its peers [14] - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is overvalued or undervalued [12][13] Conclusion - The Zacks Rank 2 suggests that Lululemon may outperform the broader market in the near term, despite concerns about its valuation and recent stock performance [15]

Core Insights - Lululemon athletica inc. has revised its revenue and earnings guidance upward for Q4 fiscal 2024 due to stronger-than-expected holiday demand [1][2] - The company anticipates revenue growth of 11-12%, reaching $3.56-$3.58 billion, an increase from the previous forecast of $3.48-$3.51 billion [2] - Earnings per share are now projected to be between $5.81 and $5.85, up from the earlier guidance of $5.56 to $5.64 [3] Revenue and Earnings Outlook - The revised revenue guidance reflects an organic growth of 6-7% when accounting for an additional 53rd week in fiscal 2024 [2] - Lululemon expects a 30-basis-point increase in gross margin compared to Q4 fiscal 2023, a significant improvement from the prior guidance which anticipated a decrease [4] - The company also forecasts a reduction in selling, general and administrative (SG&A) expenses deleverage to 80-90 basis points, better than the earlier estimate of 90-100 basis points [4] Brand Positioning and Market Strategy - Lululemon's strong brand positioning is a key driver of its success, focusing on high-performance, premium athletic apparel [5] - The company's global expansion strategy, particularly in markets like China, has led to strong brand acceptance and effective customer engagement [6] - Lululemon's commitment to enhancing customer experience through both online and in-store channels supports its market position [7] Stock Performance - Lululemon's stock has increased by 38.7% over the past three months, outperforming the industry growth of 14.4% [8]

Group 1: Abercrombie & Fitch Co (ANF) - Abercrombie & Fitch raised its fourth-quarter net sales growth outlook due to strong holiday demand [2] - The 2024 sales forecast missed analysts' estimates, leading to a 19.3% drop in share price to $129.88 [2] - The stock is on track for its worst day since May 2022, with a six-month deficit of 23.1% [2] Group 2: Lululemon Athletica Inc (LULU) - Lululemon increased its fourth-quarter sales guidance, benefiting from holiday tailwinds [3] - Shares rose by 1.2% to $400.27, finding support around the $365 region [3] - Year-over-year, the stock is down 16.9% [3] Group 3: Macy's Inc (M) - Macy's expects fourth-quarter net sales to miss expectations, resulting in a 7.1% decline in share price to $14.73 [4] - The stock is trading at its lowest level since November and is on track for its fifth consecutive loss [4] - Macy's is also facing a year-over-year deficit of 20.8% [4]

Core Insights - Lululemon Athletica has raised its sales and earnings per share (EPS) projections for Q4 following a strong holiday shopping season [1][4] - The company expects Q4 revenue to be between $3.56 billion and $3.58 billion, an increase from the previous range of $3.475 billion to $3.51 billion, exceeding the analysts' consensus of $3.52 billion [1][4] - Lululemon has also increased its EPS guidance to a range of $5.81 to $5.85 per share, up from the previous range of $5.56 to $5.64, and above the analysts' expectation of $5.64 [2] Management Commentary - Lululemon's CFO, Meghan Frank, noted that the positive response from customers to their product offerings during the holiday season enabled the company to increase its fourth-quarter guidance [3] - The adjustments were made ahead of management's meetings with investors and analysts at the ICR Conference in Orlando, Florida [3]

Core Insights - Lululemon raised its fourth quarter earnings and revenue guidance due to strong holiday season sales, expecting sales growth of 11% to 12%, amounting to $3.56 billion to $3.58 billion, up from a previous estimate of $3.48 billion to $3.51 billion [1][2] - The company also increased its earnings per share forecast to between $5.81 and $5.85, compared to the earlier guidance of $5.56 to $5.64, and anticipates gross margins to improve by 0.3 percentage points [2] Sales Performance - The positive response from shoppers during the holiday season has led to an optimistic outlook for the fourth quarter, as noted by the finance chief [3] - Retail sales in the U.S. for the holiday season, excluding automotive sales, increased by 3.8% year over year from November 1 to December 24, indicating a better-than-expected performance [6] Market Context - Lululemon's updated guidance was released ahead of the annual ICR conference, where major U.S. retailers will discuss early holiday results and performance with investors [4] - The company had previously provided cautious guidance for the holiday season, reflecting a prudent approach due to a shortened shopping season and an uncertain macroeconomic environment [5]

Core Viewpoint - Lululemon Athletica Inc. has experienced significant stock growth, gaining 70% since August 2024, indicating strong momentum as the new year begins [1][3]. Company Overview - Lululemon Athletica, headquartered in Vancouver, has a market capitalization of approximately $50 billion and is recognized as a leader in the athleisure market, known for premium yoga pants and activewear [2]. Financial Performance - The company reported over 9% year-over-year revenue growth in its latest earnings report, exceeding expectations and providing robust forward guidance [4]. - Lululemon has increased its stock repurchase program, signaling confidence from management regarding the stock's valuation [4][5]. Market Sentiment and Analyst Ratings - Analysts have highlighted Lululemon's undervalued potential, with a current MarketRank in the 68th percentile and a moderate buy rating [7]. - JPMorgan and Bernstein have reiterated positive ratings, with Bernstein setting a price target of $460, suggesting a nearly 20% upside from recent closing prices [7][8]. Consumer Trends - Anticipated growth in Lululemon's Americas business is expected to be driven by increased spending from higher-income consumers, aligning with broader market trends [8]. Technical Analysis - The stock's relative strength index (RSI) is at 63, indicating solid momentum without being overbought, suggesting potential for continued gains [11][12].

Core Insights - Lululemon athletica inc. (LULU) has demonstrated strong growth, particularly in international markets and the men's category, indicating better long-term growth potential compared to other lifestyle retailers [1][7][20] - The company's current forward 12-month price-to-earnings (P/E) multiple of 26.14X raises concerns about its valuation, significantly higher than the industry average of 14.72X [2][5] - Lululemon's price-to-sales (P/S) ratio stands at 4.24X, above the industry's 2.29X, contributing to investor unease regarding its value proposition [3][5] Valuation Concerns - Lululemon's premium valuation at 26.14X P/E is considerably higher than peers like Under Armour (24.08X), GIII Apparel Group (7.65X), and Ralph Lauren (19.1X), suggesting a disconnect between valuation and growth trajectory [5][6] - The stock's current price of $392.92 reflects a 20% discount from its 52-week high of $491.30 and a 73.9% premium from its 52-week low of $226.01 [10] Sales Performance - In the past three months, LULU shares have increased by 43.6%, outperforming the broader industry growth of 17.6% and the Consumer Discretionary sector's rise of 6.9% [8] - Lululemon reported a 2% increase in sales in the Americas for the fiscal third quarter, driven by growth in Canada, but comparable sales in the U.S. remained flat year over year [16] Growth Strategy - The company's Power of Three X2 growth plan aims for a total net revenue compound annual growth rate (CAGR) of 15% from 2021 to 2026, with a target of $12.5 billion in net revenues by 2026 [7][22] - Lululemon anticipates low-double-digit CAGR for its women's business and North America operations, with mid-teens growth in the store channel over the next five years [21] Earnings Estimates - The Zacks Consensus Estimate for LULU's fiscal 2024 and 2025 earnings per share has risen by 0.3% in the last 30 days, indicating analyst confidence in the company's growth potential [17] - For fiscal 2024, the consensus estimates imply 10% and 11% year-over-year growth in sales and EPS, respectively [18] Challenges - The slowdown in the women's business, attributed to fewer updates in product offerings, has negatively impacted conversion rates, particularly in the bottoms category and online sales [12][14] - Lululemon's Americas business faces pressure from inflation and higher interest rates, leading to reduced discretionary spending, particularly affecting luxury retail brands [15]

Core Insights - Lululemon Athletica (NASDAQ: LULU) is considered significantly undervalued based on its fundamentals and the upcoming holiday season [1] Group 1: Company Overview - The company has been highlighted for its potential in long-term wealth creation through value growth investing, value investing, and dividend investing [1] - The analysis is based on rigorous research and a focus on fundamental value investing to identify great companies at fair prices [1] Group 2: Analyst Position - The analyst holds a beneficial long position in LULU and Nike (NKE) through stock ownership, options, or other derivatives [2] - The article reflects the analyst's personal opinions and is not influenced by any business relationship with the companies mentioned [2]