LULU Stock Surges on Beating 1Q17 Expectations, Strategic Rethinking
Lululemon’s stock price performance
Lululemon Athletica (LULU) stock surged 11.5% the day after the company released its 1Q17 results on June 1. LULU stock closed at $54.29 on June 2, its largest single-day gain this year. As we’ve discussed throughout the series, the company’s 1Q17 earnings and revenue beat, the decision to close the Ivivva stores, and its fiscal 2017 guidance update were the key triggers for the jump.
The company is now sitting at YTD (year-to-date) losses of 16.5%. In comparison, its competitors Nike (NKE) and Sketchers (SKX) have gained 4.3% and 7.5% YTD, respectively. Under Armour (UAA), Foot Locker (FL), and Columbia Sportswear (COLM) are also in the red, down 30.8%, 18%, and 5%, respectively.
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Lululemon has underperformed the S&P 500 Apparel and Accessories Index, which is down ~1.7% YTD. In comparison, the S&P 500 Index (SPX) has gained 8.9% year-to-date.
Lululemon (LULU) stock is currently trading at a one-year forward price-to-earnings ratio (or PE) of 23x versus a three-year average of 28x. The company is trading at the lower side of its 52-week PE ratio of 20.6x–36.5x.
Under Armour (UAA) is the most expensive sportswear stock with a 47x forward earnings multiple. Nike and Columbia Sportswear are trading at a slight discount to LULU and are valued at 21.7x and 19.6x, respectively.
ETF investors seeking to add exposure to LULU can consider the iShares Edge MSCI Multifactor Consumer Discretionary ETF (CNDF), which invests ~1.3% of its portfolio in LULU.
In the final part of this series, we’ll see what analysts have to say about LULU after its 1Q17 results.