On Wednesday morning before the market opened, lululemon athletica (NASDAQ:LULU) announced first-quarter earnings that topped analyst estimates but offered a softer outlook than expected. The company announced earnings per share of 34 cents on $495.5 million in revenues while analysts were looking for 31 cents per share on $488 million in revenues. However, the company estimates second quarter revenues in the range of $505 to $515 million in revenues with EPS between 36-38 cents while analysts were expecting 39 cents per share on $514 million in revenues. Currently analysts have an average price target of $69.77.
Looking at the chart you will see that shares got a little bit of a boost this morning with premarket highs coming in at $70.87 after closing Tuesday at $68.14 equaling a 4% jump in price. We should see some resistance come in at $$72.50 and $75 while support should be met at $70 and and $67.50. Shares are currently well above their 200-day moving average sitting at $57.68 and are looking to gain some momentum after this earnings release. Expect shares to be on the move today with higher than normal volatility and volume as traders will be looking to capitalize on the extra movement.
CEO Comments
Laurent Potdevin, lululemon’s CEO, stated:
We are pleased with our first quarter performance, delivering strong sales results and gross margin that exceeded expectations. We finished the quarter with our inventory levels rebalanced and on track to achieve our goals for the year.”
Mr. Potdevin continued: “I’m extremely proud of our teams who have relentlessly built the capabilities and infrastructure necessary to support profitable growth. By continuing to invest in our people and focus on product innovation, we are well on our way to deliver on our five year plan.
LULU Profile
lululemon athletica inc., an athletic apparel company, together with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women, men, and female youth. It operates through two segments, Company-Operated Stores and Direct To Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle and athletic activities, such as yoga and running; other sweaty pursuits; and athletic wear for female youth. It also provides fitness-related accessories, including bags, socks, underwear, yoga mats, and water bottles. The company sells its products through a chain of company-operated stores; outlets and warehouse sales; a network of wholesale channel, such as yoga studios, health clubs, and fitness centers; license and supply arrangements; and showrooms, as well as directly to consumer through lululemon.com and ivivva.com e-commerce sites. As of January 31, 2016, it operated 363 company-operated stores under the lululemon athletica and ivivva athletica brand names in the United States, Canada, Australia, New Zealand, the United Kingdom, Singapore, Hong Kong, Germany, and Puerto Rico. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada.