Core Insights - Lululemon is set to announce its Q4 earnings on March 27th, with analysts projecting an EPS of $5.87 and revenue of $3.59 billion, reflecting an approximate year-over-year increase of 11% for both metrics [1] Financial Performance - Expected EPS: $5.87, up around 11% year-over-year [1] - Expected revenue: $3.59 billion, also up around 11% year-over-year [1]

Core Insights - lululemon athletica inc. is expected to report growth in both sales and earnings for the fourth quarter of fiscal 2024, with sales estimated at $3.6 billion, reflecting an 11.7% increase year-over-year [1] - The consensus estimate for earnings per share is $5.85, indicating a 10.6% growth from the previous year [2] Financial Performance - The company has shown consistent earnings outcomes, with a trailing four-quarter earnings surprise of 6.7% on average [3] - lululemon has an Earnings ESP of +2.00% and a Zacks Rank of 3, indicating a stable outlook for earnings [4] Business Momentum - Continued business momentum is anticipated in Q4, driven by positive consumer response, increased in-store traffic, and strong online performance [5] - The company raised its revenue guidance for Q4 to $3.56-$3.58 billion, up from the previous forecast of $3.48-$3.51 billion, indicating a year-over-year growth of 11-12% [7] Margin Expectations - Management expects earnings per share to be between $5.81 and $5.85, with a projected increase of 30 basis points in gross margin compared to Q4 of fiscal 2023 [8] - The adjusted gross margin is predicted to expand to 59.7%, with a 10-basis point increase in the adjusted operating margin to 23.3% [9] International Growth - lululemon is poised to benefit from strong business momentum in international markets, particularly in Mainland China, with international revenues expected to increase by 35.9% year-over-year for fiscal 2024 [10][11] Challenges - The company faces challenges from inflation and higher interest rates, which have led to soft discretionary spending, particularly affecting the women's category in the Americas [12] - A slowdown in the women's business is attributed to fewer updates in core and seasonal styles, negatively impacting conversion rates [13][14] Stock Performance - lululemon's shares have declined by 16.3% over the past three months, underperforming the industry and broader market indices [15] - The stock currently trades at a forward P/E multiple of 20.64X, which is above the industry average of 11.66X, indicating a premium valuation [19] Long-term Strategy - The company is focused on its Power of Three x2 growth strategy, aiming to double net revenues to $12.5 billion by 2026, with significant emphasis on international market expansion and growth in the men's category [22][23] - lululemon's long-term investment potential remains strong due to its robust fundamentals and global presence [24]

Apparel retailer Lululemon Athletica Inc (NASDAQ:LULU) is slated to report fourth-quarter earnings after the market closes on Thursday, March 27. Over the last two years, LULU has moved higher following all but one of its last eight earnings reports, including a 16% post-earnings pop in December. The stock has averaged a next-day swing of 9%, regardless of direction, though this time around, the options pits are pricing in a slightly larger move of 13.9%.Shares were last seen 3.7% higher at $334.57, though ...

Market Overview - The stock market was due for a correction after two strong years of returns, with the S&P 500 trading at a P/E multiple of 30, significantly above its historical average of 16 [1] Investment Strategy - A recommended strategy is to focus on quality businesses that are trading at discounts to the market average P/E [2] Company Analysis: Constellation Brands - Constellation Brands is a leading beverage company, particularly in imported beer, with a forward P/E of 12.5 and an above-average dividend yield [3][6] - The company reported low-single-digit sales growth for its beer portfolio, with management noting competitive pricing and tariffs on imports from Mexico as potential challenges [4] - Management projects beer sales growth of 4% to 7% in fiscal 2025, which may offset declining wine sales [5] - The company has a consistent revenue growth rate of 7% over the last decade and offers a quarterly dividend of $1.01, translating to a forward yield of 2.27% [6] - Constellation shares trade at a price-to-CFO multiple of 11, with potential for a 61% return if it returns to its 10-year median CFO multiple of 17.8 [7] Company Analysis: Lululemon Athletica - Lululemon Athletica has seen its stock rise 400% over the last decade but has been flat recently; however, it is projected to nearly triple its 2021 revenue by 2026 [8] - The company has a loyal customer base, with stores generating over $1,600 in sales per square foot and e-commerce accounting for 39% of its business [9] - Revenue increased by 9% year over year in the first three quarters of last year, which, while below its historical growth rate, outperformed competitors like Nike [10] - Lululemon is expanding globally, with 26% of revenue coming from outside the Americas, and is diversifying into new categories [11] - The stock's forward P/E of 21 is considered attractive, with expectations for double-digit revenue and earnings growth in a stronger economy [12]

Group 1 - Daniel Martins is the founder of DM Martins Research, focusing on building efficient, replicable portfolios that balance growth with reduced downside risk [1] - DM Martins Capital Management LLC, founded by Daniel, employs a macro strategy hedge fund approach using leveraged risk-parity and return stacking for long-term capital appreciation [1] - Daniel has extensive experience in equity research, having worked at FBR Capital Markets, Telsey Advisory, and Bridgewater Associates, where he honed his investment management skills [1] Group 2 - DM Martins Research has collaborated with EPB Macro Research and Risk Research, Inc., enhancing its analytical capabilities [1] - Daniel also serves as an instructor for Wall Street Prep, training analysts at major investment banks and sovereign funds [1] - He holds an MBA in Financial Instruments and Markets from New York University's Stern School of Business, indicating a strong academic background in finance [1]

The latest trading session saw Lululemon (LULU) ending at $324.45, denoting a -1.55% adjustment from its last day's close. This change lagged the S&P 500's daily loss of 0.22%. Elsewhere, the Dow lost 0.03%, while the tech-heavy Nasdaq lost 0.33%.Shares of the athletic apparel maker have depreciated by 10.25% over the course of the past month, underperforming the Consumer Discretionary sector's loss of 8.76% and the S&P 500's loss of 7.48%.The investment community will be paying close attention to the earni ...

Core Viewpoint - Lululemon is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended January 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on March 27, 2025, with a consensus EPS estimate of $5.85, reflecting a +10.6% change year-over-year. Revenues are projected to be $3.58 billion, an increase of 11.6% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.29% over the last 30 days, indicating a reassessment by analysts [4]. However, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. Lululemon currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - Lululemon has consistently beaten consensus EPS estimates, achieving this in the last four quarters, including a +6.69% surprise in the most recent quarter [12][13]. Conclusion - While Lululemon is positioned as a compelling earnings-beat candidate, it is essential to consider other factors that may influence stock performance beyond just the earnings report [14][16].

Economic Environment - The US effective tariff rate increase continues to create uncertainty in the market, with unclear long-term implications from the Trump administration [1] - The Volatility Index remains in the 20s, Treasury yields are fluctuating, and stock prices are nearing correction territory [2] Consumer Sentiment - Consumer confidence has declined, with cautionary guidance from companies during Q4 earnings calls [4] - The Johnson Redbook Index indicates steady year-over-year same-store sales growth in the 4% to 7% range since late 2023 [5] - Bank of America reported a 2.4% annualized increase in consumer spending for February 2025 [5] Corporate Performance - Delta Air Lines, American Airlines, and Southwest Airlines have lowered their earnings projections due to weaker travel demand [5][6] - Walmart reported strong Q4 earnings but provided guidance below market expectations, leading to a significant drop in its share price [6] - Lululemon is set to report Q4 earnings, with expectations of net revenue between $3.56 billion and $3.58 billion, reflecting an 11% to 12% increase year-over-year [11] Market Trends - Lululemon's stock has decreased from $423 to just above $325, mirroring broader retail sector weaknesses [10] - Disney's upcoming annual shareholder meeting is anticipated to provide insights into its streaming service and theme park performance, amid a 10% year-to-date stock decline [14][15] Future Outlook - The upcoming earnings reports from Lululemon and Disney are expected to shed light on consumer spending trends and overall economic health [16]

Market Overview - The stock market has recently entered correction territory, defined as a decline of 10% to 20% from its recent peak, with the Nasdaq Composite down 9% year-to-date [1] Investment Opportunities - During market downturns, investment opportunities increase as stock prices may not fully reflect the underlying business values [2] - Three companies identified as solid buys during this correction are Costco Wholesale, Lululemon Athletica, and Target [3] Costco Wholesale - Costco has shown exceptional performance, with a stock price increase of over 200% in the past five years, excluding dividends [4] - The company maintains strong revenue and comparable sales growth, driven by a compelling membership fee model that fosters customer loyalty [5] - Renewal rates for memberships are consistently above 90%, reaching 93% in the U.S. and Canada, even after a recent fee increase [6] - Costco's paid household members increased by 6.8% year-over-year to 78.4 million, with revenue up 9.1% and earnings per share rising from $3.92 to $4.02 [7] - Despite a high P/E ratio of 54, the current dip may present a good entry point for long-term investors [8] Lululemon Athletica - Lululemon has achieved approximately 20% annual growth in revenue and earnings over the past decade, with a current P/E ratio of 23 [9] - The brand has outperformed competitors like Nike, indicating strong brand power and growth potential [10] - For fiscal 2024 Q4, Lululemon expects an 11% year-over-year revenue increase, with international revenue up 33% year-over-year [11] - The company reported $1.7 billion in earnings on $10 billion of revenue over the last four quarters, highlighting its profitability and growth in international markets [12] Target - Target's stock has declined roughly 50% over the past three years due to weak consumer spending and internal challenges [13] - The latest earnings report indicated flat comparable sales and minimal growth expectations for fiscal 2025 [14] - Target's management has outlined a long-term growth plan, predicting a 15% total sales increase by 2030 [15] - The company aims to grow through new store openings, expanding owned brands, and enhancing same-day fulfillment services [16] - Currently trading at a P/E ratio of 12 and offering a dividend yield of about 4%, Target presents a value opportunity for income investors [17] - The recent sell-off may allow investors to acquire shares of this established retailer at a discounted price [18]

Core Viewpoint - Lululemon's stock performance has lagged behind major indices, with a significant decline over the past month, while upcoming earnings are anticipated to show growth in both EPS and revenue [1][2]. Company Performance - Lululemon closed at $311.03, reflecting a +0.44% change from the previous day, which is below the S&P 500's gain of 2.13% on the same day [1]. - Over the past month, Lululemon shares have decreased by 20.77%, underperforming the Consumer Discretionary sector's loss of 12.53% and the S&P 500's loss of 9.57% [1]. Upcoming Earnings - The earnings report is scheduled for March 27, 2025, with projected EPS of $5.85, indicating a 10.59% increase year-over-year [2]. - Quarterly revenue is expected to reach $3.58 billion, representing an 11.68% increase from the same period last year [2]. Analyst Projections - Recent shifts in analyst projections for Lululemon are crucial for understanding near-term business trends, with positive revisions suggesting a favorable outlook on the company's health and profitability [3]. - The Zacks Rank system, which incorporates estimate changes, provides actionable ratings, with stocks rated 1 historically yielding an average annual return of +25% since 1988 [4][5]. Valuation Metrics - Lululemon currently has a Forward P/E ratio of 20.16, which is higher than the industry average of 13.75, indicating a premium valuation [6]. - The company has a PEG ratio of 1.88, compared to the industry average of 1.65, suggesting that Lululemon's valuation is also influenced by its expected earnings growth rate [7]. Industry Context - The Textile - Apparel industry, part of the Consumer Discretionary sector, holds a Zacks Industry Rank of 65, placing it in the top 26% of over 250 industries [8].