20 Feb

Can Lululemon Keep Up Its Strong Revenue Growth?

WRITTEN BY Sharon Bailey

Top-line growth so far

Lululemon’s (LULU) revenue increased 24.9%, 24.5%, and 20.8% in the first, second, and third quarters of fiscal 2018, respectively. Overall, the company’s revenue increased 23.3% to $2.1 billion in the first nine months of fiscal 2018. Lululemon’s revenue growth in this period was driven by a strong rise in direct-to-consumer revenue, same-store sales growth of 8%, and revenue contribution from new stores.

Based on the company’s latest guidance on January 14, Lululemon expects its revenue in the range of $1.14 billion–$1.15 billion in Q4 of fiscal 2018, which ended on February 3, 2019. Analysts expect the company’s fourth-quarter revenue to rise 23.8% year-over-year to $1.2 billion.

Can Lululemon Keep Up Its Strong Revenue Growth?

Analysts expect Lululemon’s revenue to increase 23.4% to $3.3 billion in fiscal 2018. Currently, analysts expect a 13.8% rise in Lululemon’s fiscal 2019 revenue.

Growth initiatives

Lululemon is recording rapid growth in its direct-to-consumer business, which comprises sales from e-commerce websites and mobile apps. Lululemon’s revenue from the direct-to-consumer segment grew 50.7% to $514.6 million in the first nine months of fiscal 2018. The company’s direct-to-consumer revenue accounted for 24.3% of the overall revenue in the first nine months of fiscal 2019, compared to 19.9% in the comparable period of the previous fiscal year.

The company’s efforts to strengthen its digital capabilities, personalization efforts, and attractive merchandise have helped increase online traffic and improve conversion rates.

Lululemon is seeking growth in the outerwear category. The company’s outerwear merchandise recorded comparable sales growth of 150% and 40% in the men’s and women’s divisions, respectively, in Q3 of fiscal 2018. Lululemon sees tremendous growth in this category and is working on offering tougher, water-resistant styles. Lululemon is also looking for opportunities in the bra category with innovations such as the “Like Nothing” bra.

International expansion remains a key focus for the company. Lululemon’s revenue outside North America grew 45.4% to $244.4 million in the first nine months of fiscal 2018. Revenue outside North America accounted for 11.5% of the company’s overall revenue in the first nine months of fiscal 2018, compared to 9.8% in the first nine months of fiscal 2017.

Let’s discuss Lululemon’s valuation in the next part of this series.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.

172.31.16.229