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lululemon (LULU) Raises Q4 Forecast on Upbeat Holiday Feat
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lululemon athletica inc. (LULU - Free Report) revised its guidance for the fourth quarter of fiscal 2023, driven by a robust holiday season performance. The raised view comes just ahead of its participation in the 2024 ICR Conference, scheduled for Jan 8-10, 2024. The updated guidance reveals a notable increase in net revenues and earnings per share, underlining the company's resilience and ability to adapt to evolving consumer preferences.
LULU stated that it witnessed balanced sales trends across channels, categories and geographies during the holiday selling period, which enabled it to raise its view for the fiscal fourth quarter. The company’s sales mainly benefited from its focus on fresher styles. Management noted that guests continued to respond positively to lululemon's innovative and versatile product offerings.
Shares of this Zacks Rank #2 (Buy) company have rallied 55.7% in the past year compared with the industry’s growth of 12.7%.
Image Source: Zacks Investment Research
Q4 Outlook
The company anticipates net revenues of $3.170-$3.190 billion for the fourth quarter of fiscal 2023, indicating a 14-15% year-over-year increase. It earlier predicted net revenues of $3.135-$3.170 billion. The raised revenue guidance reflects the brand's strong market performance.
Earnings per share are expected to be $4.96-$5.00 for the fiscal fourth quarter, showcasing an upward revision from $4.85-$4.93 stated earlier. The revised view not only reflects strong sales but also the brand's effective cost management and operational efficiency.
The gross margin for the fiscal fourth quarter is expected to be 58.6-58.7%, up from the previously stated 58.3-58.6%. This suggests that lululemon is successfully navigating market dynamics and optimizing its cost structures to achieve improved profitability.
While there is an upward revision in net revenues, earnings per share and the gross margin, the company retained its previous guidance for selling, general and administrative expenses, and the effective tax rate. This suggests that lululemon is maintaining a disciplined approach to cost management, ensuring a balance between top-line growth and operational efficiency.
Conclusion
The positive adjustments in net revenues, earnings per share and gross margin highlight lululemon’s resilience and strategic positioning in the competitive athletic apparel market. As the brand continues to innovate and resonate with consumers, it appears poised for sustained success in the coming quarters.
Other Stocks to Consider
Some other top-ranked companies in the Consumer Discretionary sector are GIII Apparel Group (GIII - Free Report) , Skechers (SKX - Free Report) and PVH Corporation (PVH - Free Report) .
GIII Apparel, a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands, currently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 541.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GIII Apparel’s current financial-year earnings suggests growth of 39.3% from the prior-year reported level. The consensus mark for GIII’s earnings per share has moved up 4.7% in the past 30 days.
Skechers, which designs, develops, markets and distributes footwear for men, women and children in the United States and overseas, currently flaunts a Zacks Rank #1. SKX has a trailing four-quarter earnings surprise of 50.3%, on average.
The Zacks Consensus Estimate for Skechers’ 2023 sales and earnings suggests growth of 8.2% and 44.1%, respectively, from the year-ago reported numbers. The consensus mark for SKX’s earnings per share has moved down by a penny in the past 30 days.
PVH Corp specializes in designing and marketing branded dress shirts, neckwear, sportswear, jeanswear, intimate apparel, swim products, footwear, handbags and related products. It currently carries a Zacks Rank #2. PVH has a trailing four-quarter earnings surprise of 18.9%, on average.
The Zacks Consensus Estimate for PVH’s current financial-year sales and earnings suggests growth of 1.2% and 16.6%, respectively, from the year-ago period’s actuals. The consensus mark for PVH’s earnings per share has moved up by a penny in the past 30 days.
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lululemon (LULU) Raises Q4 Forecast on Upbeat Holiday Feat
lululemon athletica inc. (LULU - Free Report) revised its guidance for the fourth quarter of fiscal 2023, driven by a robust holiday season performance. The raised view comes just ahead of its participation in the 2024 ICR Conference, scheduled for Jan 8-10, 2024. The updated guidance reveals a notable increase in net revenues and earnings per share, underlining the company's resilience and ability to adapt to evolving consumer preferences.
LULU stated that it witnessed balanced sales trends across channels, categories and geographies during the holiday selling period, which enabled it to raise its view for the fiscal fourth quarter. The company’s sales mainly benefited from its focus on fresher styles. Management noted that guests continued to respond positively to lululemon's innovative and versatile product offerings.
Shares of this Zacks Rank #2 (Buy) company have rallied 55.7% in the past year compared with the industry’s growth of 12.7%.
Image Source: Zacks Investment Research
Q4 Outlook
The company anticipates net revenues of $3.170-$3.190 billion for the fourth quarter of fiscal 2023, indicating a 14-15% year-over-year increase. It earlier predicted net revenues of $3.135-$3.170 billion. The raised revenue guidance reflects the brand's strong market performance.
Earnings per share are expected to be $4.96-$5.00 for the fiscal fourth quarter, showcasing an upward revision from $4.85-$4.93 stated earlier. The revised view not only reflects strong sales but also the brand's effective cost management and operational efficiency.
The gross margin for the fiscal fourth quarter is expected to be 58.6-58.7%, up from the previously stated 58.3-58.6%. This suggests that lululemon is successfully navigating market dynamics and optimizing its cost structures to achieve improved profitability.
While there is an upward revision in net revenues, earnings per share and the gross margin, the company retained its previous guidance for selling, general and administrative expenses, and the effective tax rate. This suggests that lululemon is maintaining a disciplined approach to cost management, ensuring a balance between top-line growth and operational efficiency.
Conclusion
The positive adjustments in net revenues, earnings per share and gross margin highlight lululemon’s resilience and strategic positioning in the competitive athletic apparel market. As the brand continues to innovate and resonate with consumers, it appears poised for sustained success in the coming quarters.
Other Stocks to Consider
Some other top-ranked companies in the Consumer Discretionary sector are GIII Apparel Group (GIII - Free Report) , Skechers (SKX - Free Report) and PVH Corporation (PVH - Free Report) .
GIII Apparel, a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands, currently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 541.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GIII Apparel’s current financial-year earnings suggests growth of 39.3% from the prior-year reported level. The consensus mark for GIII’s earnings per share has moved up 4.7% in the past 30 days.
Skechers, which designs, develops, markets and distributes footwear for men, women and children in the United States and overseas, currently flaunts a Zacks Rank #1. SKX has a trailing four-quarter earnings surprise of 50.3%, on average.
The Zacks Consensus Estimate for Skechers’ 2023 sales and earnings suggests growth of 8.2% and 44.1%, respectively, from the year-ago reported numbers. The consensus mark for SKX’s earnings per share has moved down by a penny in the past 30 days.
PVH Corp specializes in designing and marketing branded dress shirts, neckwear, sportswear, jeanswear, intimate apparel, swim products, footwear, handbags and related products. It currently carries a Zacks Rank #2. PVH has a trailing four-quarter earnings surprise of 18.9%, on average.
The Zacks Consensus Estimate for PVH’s current financial-year sales and earnings suggests growth of 1.2% and 16.6%, respectively, from the year-ago period’s actuals. The consensus mark for PVH’s earnings per share has moved up by a penny in the past 30 days.