Is This 1 More Reason to Buy Lululemon Stock?

Core Viewpoint - Lululemon Athletica has provided positive financial updates, indicating a solid performance for the upcoming holiday quarter, which is encouraging for investors [1][2]. Financial Guidance - Management expects fourth-quarter revenue to be between $3.500 billion and $3.585 billion, with earnings per share projected between $4.66 and $4.76, leaning towards the high end of these ranges [4]. - The company anticipates a revenue decline of 3% to 1% year-over-year, but when adjusted for an extra week last year, the growth rate is expected to be between 2% and 4% [5][6]. Growth Rates - Adjusted for the extra week, Lululemon expects fourth-quarter sales growth of 3% to 4%, which, while slower than the 7% growth reported in Q3, still represents growth [6]. Geographic Performance - Lululemon's international business has shown strong growth, with international revenue increasing by 33% in Q3, while Americas revenue fell by 2% [8]. - Overall comparable sales rose by 1%, with Americas down 5% and international up 18%, indicating a shift in reliance towards international markets [8][9]. U.S. Business Focus - The company is actively working to improve its U.S. business, with management emphasizing their action plan to drive improvements [10]. - Investors are encouraged to look for signs of a turnaround in the U.S. operations in the upcoming fourth-quarter earnings report [12]. Valuation - Lululemon shares are currently trading at a price-to-earnings ratio of 15 and a forward price-to-earnings ratio of 16, suggesting a reasonable valuation despite recent stock price increases [11]. - The stock has already priced in some weaknesses in the U.S. market, making it an attractive option for investors [11].