[Lululemon Fiscal 2024 Earnings Release](index=1&type=section&id=lululemon%20athletica%20inc.%20Announces%20Fourth%20Quarter%20and%20Full%20Year%20Fiscal%202024%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Lululemon achieved record annual revenue exceeding $10 billion in fiscal 2024, driven by strong international growth and robust fourth-quarter performance Fiscal 2024 Key Financial Results | Metric | Fourth Quarter 2024 | Full Year 2024 | | :--- | :--- | :--- | | Net Revenue | $3.6 billion (+13% YoY) | $10.6 billion (+10% YoY) | | Diluted EPS | $6.14 | $14.64 | - The company's performance exceeded expectations, driven by new product introductions and innovation[2](index=2&type=chunk) [Fourth Quarter 2024 Performance](index=1&type=section&id=Fourth%20Quarter%202024%20Performance) Q4 2024 saw net revenue increase 13% to $3.6 billion, driven by strong international growth and improved margins Q4 2024 vs. Q4 2023 Performance | Metric | Q4 2024 | Q4 2023 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $3.6 billion | $3.2 billion | +13% | | Gross Profit | $2.2 billion | $1.9 billion | +15% | | Gross Margin | 60.4% | 59.4% | +100 bps | | Income from Operations | $1.0 billion | $0.9 billion | +14% | | Diluted EPS | $6.14 | $5.29 | +16.1% | - **Americas Net Revenue:** Increased by **7%**[3](index=3&type=chunk) - **International Net Revenue:** Increased by **38%**[3](index=3&type=chunk) - **Comparable Sales:** Increased by **3%** (excluding the 53rd week)[3](index=3&type=chunk) - **Share Repurchases:** **0.9 million** shares for **$332.2 million**[3](index=3&type=chunk) - **Store Openings:** **18** net new company-operated stores[3](index=3&type=chunk) [Full Year 2024 Performance](index=1&type=section&id=Full%20Year%202024%20Performance) Full fiscal year 2024 net revenue grew 10% to $10.6 billion, driven by strong international performance and margin expansion Full Year 2024 vs. 2023 Performance | Metric | Fiscal Year 2024 | Fiscal Year 2023 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $10.6 billion | $9.6 billion | +10% | | Gross Profit | $6.3 billion | $5.6 billion | +12% | | Gross Margin | 59.2% | 58.3% | +90 bps | | Income from Operations | $2.5 billion | $2.1 billion | +17% | | Diluted EPS | $14.64 | $12.20 | +20.0% | - **Americas Net Revenue:** Increased by **4%**[3](index=3&type=chunk)[11](index=11&type=chunk) - **International Net Revenue:** Increased by **34%**[3](index=3&type=chunk)[11](index=11&type=chunk) - **Comparable Sales:** Increased by **4%** (excluding the 53rd week)[3](index=3&type=chunk)[11](index=11&type=chunk) - **Share Repurchases:** **5.1 million** shares for **$1.6 billion**[3](index=3&type=chunk)[11](index=11&type=chunk) - **Store Additions:** **56** net new stores, including 14 from the Mexico acquisition[3](index=3&type=chunk)[11](index=11&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management expressed satisfaction with 2024 results, reaffirming the 'Power of Three ×2' plan and providing 2025 growth outlook - The CEO stated that Q4 results exceeded expectations, attributing the success to newness and innovation in the product assortment[2](index=2&type=chunk) - The CFO highlighted surpassing **$10 billion** in annual revenue for the first time and emphasized remaining agile amid macro uncertainties[5](index=5&type=chunk) - The company is executing its "Power of Three ×2" growth plan, which targets doubling 2021 net revenue of **$6.25 billion** to **$12.5 billion** by 2026[10](index=10&type=chunk) [Balance Sheet Highlights](index=3&type=section&id=Balance%20Sheet%20Highlights) Lululemon maintained strong liquidity with $2.0 billion cash and $393.9 million available credit, with inventories up 9% Key Balance Sheet Items (End of FY 2024) | Item | Value | | :--- | :--- | | Cash and cash equivalents | $2.0 billion | | Available Credit Facility | $393.9 million | | Inventories | $1.4 billion (+9% YoY) | [Fiscal 2025 Outlook](index=3&type=section&id=Fiscal%2025%20Outlook) The company provided fiscal 2025 guidance, projecting Q1 revenue of $2.335-$2.355 billion and full-year revenue of $11.15-$11.30 billion Q1 Fiscal 2025 Guidance | Metric | Expected Range | | :--- | :--- | | Net Revenue | $2.335 billion - $2.355 billion | | Revenue Growth | 6% - 7% | | Diluted EPS | $2.53 - $2.58 | Full Year Fiscal 2025 Guidance | Metric | Expected Range | | :--- | :--- | | Net Revenue | $11.150 billion - $11.300 billion | | Revenue Growth | 5% - 7% | | Revenue Growth (ex. 53rd week) | 7% - 8% | | Diluted EPS | $14.95 - $15.15 | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements detail Lululemon's performance, showing revenue and net income growth, increased assets, and strong operating cash flow [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Fiscal 2024 net revenue increased to $10.59 billion, with gross profit rising to $6.27 billion and diluted EPS reaching $14.64 Fiscal Year Performance (in thousands) | Account | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Net revenue | $10,588,126 | $9,619,278 | | Gross profit | $6,270,811 | $5,609,405 | | Income from operations | $2,505,697 | $2,132,676 | | Net income | $1,814,616 | $1,550,190 | | Diluted earnings per share | $14.64 | $12.20 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of February 2, 2025, total assets reached $7.60 billion, with cash decreasing to $1.98 billion and inventories increasing to $1.44 billion Balance Sheet Summary (in thousands) | Account | Feb 2, 2025 | Jan 28, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,984,336 | $2,243,971 | | Inventories | $1,442,081 | $1,323,602 | | Total assets | $7,603,292 | $7,091,941 | | Total liabilities | $3,279,245 | $2,859,860 | | Total stockholders' equity | $4,324,047 | $4,232,081 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Fiscal 2024 operating cash flow was $2.27 billion, with significant cash used in financing activities, leading to a net cash decrease of $260 million Cash Flow Summary (in thousands) | Activity | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,272,713 | $2,296,164 | | Net cash used in investing activities | ($798,174) | ($654,132) | | Net cash used in financing activities | ($1,652,508) | ($548,828) | | Net (decrease) increase in cash | ($259,635) | $1,089,104 | [Supplemental Financial Information](index=10&type=section&id=Supplemental%20Financial%20Information) Supplemental information includes non-GAAP reconciliations, detailing constant dollar revenue, 53rd week impact, and store network expansion [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP measures, adjusting for currency, 53rd week impact, and lululemon Studio charges for clearer trend analysis FY 2024 Revenue Growth Reconciliation | Metric | Reported Change | Constant Dollar Change | Change ex. 53rd Week (non-GAAP) | | :--- | :--- | :--- | :--- | | Total Revenue | 10% | 11% | 8% | - For fiscal 2023, results were adjusted to exclude charges related to lululemon Studio, which included inventory provisions, asset impairments, and restructuring costs[16](index=16&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - This adjustment increased FY2023 diluted EPS from **$12.20** (GAAP) to **$12.77** (Adjusted)[16](index=16&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [Store Network Expansion](index=13&type=section&id=Store%20Network%20Expansion) Lululemon expanded its physical retail footprint in fiscal 2024, adding a net of 56 stores to reach 767 company-operated locations Store Count Change in FY 2024 | Quarter | Stores Opened | Stores Closed | Net Change | | :--- | :--- | :--- | :--- | | Q1 2024 | 5 | 5 | 0 | | Q2 2024 | 11 | 1 | +10 | | Q3 2024 | 28 | 0 | +28 | | Q4 2024 | 21 | 3 | +18 | | **Total** | **65** | **9** | **+56** | - The company ended fiscal 2024 with **767** stores, up from 711 at the start of the year[46](index=46&type=chunk)

Fourth quarter results from Lululemon (LULU)  will highlight this week’s earnings lineup with the apparel retailer set to release its Q4 report after-market hours on Thursday, March 27.At times, the yoga-inspired athletic gear provider has etched out wonderful gains for investors, but LULU shares have fallen 11% year to date and have performed virtually flat over the last three years. Although Lululemon has taken market share from historic athletic apparel leaders such as Nike (NKE) , investors have been sk ...

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]