Lululemon beats Street estimates in fiscal Q1

Lululemon Athletica Inc (NASDAQ: LULU) is trading up in extended hours on Wednesday after reporting market-beating financial results for its first quarter.

Lululemon stock gains on upbeat full-year guidance

Investors are cheering also because the management impressed with its future guidance. $LULU now forecasts its revenue to fall between $10.7 billion and $10.8 billion on up to $14.47 a share of per-share earnings in fiscal 2024.

Analysts, in comparison, were at $10.75 billion and $14.11 per share, respectively. Calvin McDonald – the chief executive of Lululemon Athletica said in a press release today:

Looking ahead, we continue to have a significant runway for growth and are confident in our team’s ability to powerfully deliver for our guests in 2024 and beyond.

The Nasdaq listed firm ended its Q1 with 711 company-operated stores. Lululemon stock is now down some 30% versus the start of 2024.

Watch here: https://www.youtube.com/embed/bFmORZQQ3d4?feature=oembed

Lululemon Q1 earnings snapshot

• Earned $321 million versus the year-ago $290 million
• Per-share earnings also improved from $2.28 to $2.55
• Diluted EPS printed at $2.54 as per the earnings report
• Revenue climbed 10% year-over-year to $2.21 billion
• Consensus was $2.40 a share on $2.2 billion in revenue

Lululemon Athletica Inc improved its gross margin by 20 basis points to 57.7% in the first quarter. CEO McDonald also said on Wednesday:

In the first quarter, we saw strong momentum in our international markets, demonstrating how our brand continues to resonate around the world.

What else was noteworthy in $LULU in Q1 earnings?

Other prominent figures in Lululemon’s quarterly report include comparable sales that went up 7.0% versus last year on a constant dollar basis.

The athletic apparel retail firm spent just under $300 million on stock repurchase in its fiscal Q1. On Wednesday, its board authorised another $1.0 billion worth of share buybacks. Meghan Frank – $LULU’s chief of finance said today:

We remain focused on leveraging our strengths and differentiated model to advance our Power of Three ×2 strategy and fuel performance. We are energized by the opportunities in front of us and believe we are well-positioned to drive sustainable, long-term growth.

Earlier this week, analysts at Truist Financial trimmed their price target on Lululemon stock sharply from $498 to $415. That, nonetheless, suggests a near 20% upside on top of after-hours gains in $LULU. Shares of the $37 billion giant based out of Vancouver, Canada do not, however, pay a dividend at writing.

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