Lululemon Struggles with Mixed Results and Weak Guidance
Lululemon Athletica (LULU) faced a series of downgrades and price target revisions after its 4Q16 earnings miss and its dismal guidance for the coming year.
The Vancouver-based athletic wear retailer, which reported its 4Q16 results on March 29, 2017, registered a 17.6% YoY (year-over-year) rise in its earnings per share on total sales of $790 million. While its revenue came in ahead of analysts’ consensus expectation of $783.5 million, its earnings fell $0.01 short of the consensus forecast. Its results relate to the three-month period that ended on January 29, 2017.
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Lululemon’s share price plunged 23.4% the day after its results release, washing away its YTD (year-to-date) gains. The company is now sitting on a YTD fall of 20%. In comparison, sportswear giant Nike (NKE) has risen 9.6% YTD, while Columbia Sportswear (COLM) has risen 1% YTD.
About Lululemon Athletica
Lululemon Athletica operates under the Lululemon and ivivva brand names. Since it opened its first store in 2000 in Vancouver, LULU has expanded to 406 stores located in the United States, Canada, Australia, New Zealand, and the United Kingdom as of January 29, 2017.
The company has a market capitalization of $7.1 billion as of April 2, 2017. It forms part of the iShares Edge MSCI Multifactor Consumer Discretionary ETF (CNDF), which invests 1.2% of its portfolio in the company.
What’s this series all about?
In this series, we’ll talk about analysts’ recent actions on Luluemon. We’ll discuss the company’s 4Q16 results and next year’s guidance. We’ll also briefly touch on the company’s current valuation and its YTD stock market performance.