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Lululemon (LULU) to Post Q4 Earnings: What's in the Cards?
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Lululemon Athletica Inc. (LULU - Free Report) is slated to report fourth-quarter fiscal 2016 results on Mar 29, after the closing bell. The big question facing investors is, whether this yoga-inspired athletic apparel company will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, the company’s reported a positive earnings surprise of 9.3%. Overall, the company has outperformed the Zacks Consensus Estimate in two of the trailing four quarters, delivering an average beat of 3.9%. Let’s see how things are shaping up for this announcement.
While most retailers struggled, Lululemon emerged strong this holiday season, driven by solid performance across both stores and online. The company attributed the superb show to an impressive operational execution, enhanced customer experience and robust assortments. Further, it remains hopeful of driving momentum forward, which encouraged management to raise the lower-end of fourth-quarter fiscal 2016 earnings and sales guidance.
The company expects net revenues in the range of $775–$785 million, compared with $765–$785 million anticipated earlier. Further, it anticipates comparable stores sales (comps) growth of mid-single digits, on a constant dollar basis. Earnings for the quarter are envisioned to lie in a band of 99 cents to $1.01 per share, up from 96 cents to $1.01 per share forecasted earlier.
Estimates have been stable lately ahead of the company's fourth-quarter earnings. Further, the current Zacks Consensus Estimate of $1.01 per share for the fiscal fourth quarter, reflects a year-over-year growth of nearly 18.5%. Analysts polled by Zacks expect revenues of $784.7 million for the fiscal fourth quarter, reflecting nearly 11.4% growth from the year-ago quarter.
Moreover, Lululemon’s stock performance reveals that the company has outperformed the broader industry in the last three months. Though the stock has declined 3.3% year to date, it has outpaced the Zacks categorized Textile – Apparel industry's fall of 8.9% in the same period.
However, the fading popularity of athleisure wear is likely to take a toll on the company’s performance as denims are back in vogue. Stiff competition from other players, along with currency woes and macroeconomic challenges also remains a headwind.
With these mixed factors at play, we would like to wait and see what's in store for this Vancouver-based athletic apparel company in the quarter to be reported.
Earnings Whispers
Our proven model does not conclusively show that Lululemon is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Lululemon currently has an Earnings ESP of -0.99%. This is because both the Most Accurate estimate of $1.00 is above the Zacks Consensus Estimate of $1.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lululemon currently carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of -0.99% makes surprise prediction unlikely.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
G-III Apparel Group LTD. (GIII - Free Report) , with an Earnings ESP of +100.00% and a Zacks Rank #3, is slated to release earnings on Mar 27.
Constellation Brands Inc. (STZ - Free Report) with an Earnings ESP of +0.73% and a Zacks Rank #3, is scheduled to release earnings on Apr 6.
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Lululemon (LULU) to Post Q4 Earnings: What's in the Cards?
Lululemon Athletica Inc. (LULU - Free Report) is slated to report fourth-quarter fiscal 2016 results on Mar 29, after the closing bell. The big question facing investors is, whether this yoga-inspired athletic apparel company will be able to deliver a positive earnings surprise in the quarter to be reported.
Last quarter, the company’s reported a positive earnings surprise of 9.3%. Overall, the company has outperformed the Zacks Consensus Estimate in two of the trailing four quarters, delivering an average beat of 3.9%. Let’s see how things are shaping up for this announcement.
lululemon athletica inc. Price and EPS Surprise
lululemon athletica inc. Price and EPS Surprise | lululemon athletica inc. Quote
Factors Influencing This Quarter
While most retailers struggled, Lululemon emerged strong this holiday season, driven by solid performance across both stores and online. The company attributed the superb show to an impressive operational execution, enhanced customer experience and robust assortments. Further, it remains hopeful of driving momentum forward, which encouraged management to raise the lower-end of fourth-quarter fiscal 2016 earnings and sales guidance.
The company expects net revenues in the range of $775–$785 million, compared with $765–$785 million anticipated earlier. Further, it anticipates comparable stores sales (comps) growth of mid-single digits, on a constant dollar basis. Earnings for the quarter are envisioned to lie in a band of 99 cents to $1.01 per share, up from 96 cents to $1.01 per share forecasted earlier.
Estimates have been stable lately ahead of the company's fourth-quarter earnings. Further, the current Zacks Consensus Estimate of $1.01 per share for the fiscal fourth quarter, reflects a year-over-year growth of nearly 18.5%. Analysts polled by Zacks expect revenues of $784.7 million for the fiscal fourth quarter, reflecting nearly 11.4% growth from the year-ago quarter.
Moreover, Lululemon’s stock performance reveals that the company has outperformed the broader industry in the last three months. Though the stock has declined 3.3% year to date, it has outpaced the Zacks categorized Textile – Apparel industry's fall of 8.9% in the same period.
However, the fading popularity of athleisure wear is likely to take a toll on the company’s performance as denims are back in vogue. Stiff competition from other players, along with currency woes and macroeconomic challenges also remains a headwind.
With these mixed factors at play, we would like to wait and see what's in store for this Vancouver-based athletic apparel company in the quarter to be reported.
Earnings Whispers
Our proven model does not conclusively show that Lululemon is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Lululemon currently has an Earnings ESP of -0.99%. This is because both the Most Accurate estimate of $1.00 is above the Zacks Consensus Estimate of $1.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lululemon currently carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company’s ESP of -0.99% makes surprise prediction unlikely.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
G-III Apparel Group LTD. (GIII - Free Report) , with an Earnings ESP of +100.00% and a Zacks Rank #3, is slated to release earnings on Mar 27.
Darden Restaurants Inc. (DRI - Free Report) , with an Earnings ESP of +0.79% and a Zacks Rank #2 (Buy), is scheduled to release earnings on Mar 28. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Constellation Brands Inc. (STZ - Free Report) with an Earnings ESP of +0.73% and a Zacks Rank #3, is scheduled to release earnings on Apr 6.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>