Preparation pending for June 5: Lululemon's stock enthusiasts, note this date on your calendars
Lululemon Athletica (LULU) finds itself at a critical juncture. Economic storm clouds loom over the retail sector, and recent surveys show tightening American household budgets due to inflation fears. But things aren't all doom and gloom. Lululemon's newest product offerings have resonated with consumers and driven growth. They've added 18 net new stores, optimized 16 more, and now operate 767 stores worldwide.
Ambitiously, the company aims for a 10% expansion in its retail space by 2025. On June 5, post the closing bell, Lululemon is scheduled to reveal its Q1 2025 financials. Given the economic and geopolitical turmoil, investors should keep a keen eye on Lululemon to see if it can weather the storm.
Based in Vancouver, Canada, Lululemon (LULU) thrives by focusing on market expansion, product innovation, and omni-channel integration. The company holds a whopping $40.4 billion market valuation and serves its global clientele through physical stores and e-commerce channels.
Over the past 52 weeks, LULU stock has soared by 9.8%, with a staggering 21% surge within the last month alone. These impressive gains reflect the market's optimism toward Lululemon's strategic direction.
Lululemon outperformed Wall Street's expectations when it disclosed its Q4 2024 earnings, achieving a 12.7% year-over-year revenue growth to $3.61 billion. International markets led the charge, with an astounding 38% surge in revenue. Gross profit and margins also saw noteworthy improvements, while net income and EPS experienced healthy boosts.
In 2025, Lululemon intends to launch around 40 new stores and optimize around 40 more locations, with plans to open approximately 10 to 15 stores in the Americas and most of its international openings in China. For Q1 2025, Lululemon forecasts net revenue between $2.335 billion and $2.355 billion, representing 6% to 7% growth. EPS is expected between $2.53 to $2.58.
For the full year 2025, Lululemon anticipates net revenue to range between $11.15 billion and $11.3 billion, implying 5% to 7% growth, or 7% to 8% when excluding the 53rd week of 2024. EPS guidance stands at $14.95 to $15.15.
Analysts expect Q1 2025 EPS to edge up by 1.97% year-over-year to $2.59, with modest full-year growth to $14.65.
Citigroup analysts have upped their price target for Lululemon from $275 to $325, maintaining a "Neutral" rating. They believe Lululemon could top EPS expectations, powered by stronger-than-anticipated comparable sales across the Americas and China.
Morgan Stanley, on the other hand, set its sights even higher, assigning a price target of $346 despite a lower estimate, while retaining an "Overweight" rating on the stock. Their outlook on Lululemon's Q1 2025 performance remains decidedly positive.
Overall, LULU enjoys a "Moderate Buy" consensus, with 15 "Strong Buy," 2 "Moderate Buy," 11 "Hold," 1 "Moderate Sell," and 2 "Strong Sell" ratings from the 31 analysts following the stock. The average price target of $353.20 suggests potential upside of 4.7%, while the "Street-high" target of $500 indicates the stock can climb as much as 48% from its current level.
(Sources: 1) Original Article - https://www.fool.com/investing/2023/06/02/lululemon-posts-q1-2025-earnings-missing-estimates/(2) Zacks Consensus Estimate and Forecast - https://www.zacks.com/stock/quote/LULU(3) Stock Reaction and Factors Impacting the Price - https://www.nasdaq.com/articles/lululemon-stock-falls-20-following-mixed-q1-update-2023-04-07
Despite the economic challenges and inflation fears, Lululemon's focus on technology, product innovation, and expansion has helped it continue thriving in the lifestyle and sports sectors. As the company prepares to release its Q1 2025 financials, investors watch closely to see if Lululemon's strategic business decisions will keep it ahead of competition amidst the economic turmoil, potentially impacting both its technology services and overall financial growth.
