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Time to Buy Lululemon (LULU) or Ralph Lauren (RL) Stock Post Earnings
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Ralph Lauren (RL - Free Report) ) and Lululemon (LULU - Free Report) ) are two apparel leaders that investors may be eying after reporting strong quarterly results on May 25 and June 1 respectively.
With both premium designer companies beating top and bottom expectations let’s see if now is a good time to buy.
Ralph Lauren Q4 Review
Driven by strength in Asia the famous Polo brand retailer Ralph Lauren largely exceeded its fiscal fourth-quarter earnings expectations while also surpassing sales forecast. Ralph Lauren crushed its Q4 EPS estimates by 38% at $0.90 per share compared to expectations of $0.65 a share.
Attributed to Asia revenue jumping 13% year over year to $390 million, Ralph Lauren was able to beat top line estimates by 5% with total sales for Q4 coming in at $1.54 billion.
Image Source: Zacks Investment Research
Overall, Ralph Lauren posted strong quarterly growth as earnings climbed 83% YoY with sales up 1% from the prior-year quarter. With that being said the premium footwear and apparel leader does anticipate its operating environment will still be somewhat challenging in the upcoming quarter with the potential of slowing sales.
Still, Ralph Lauren’s earnings are now forecasted to rise 12% in its current fiscal 2024 and jump another 13% in FY25 at $10.62 per share. Sales are expected to be up 2% in FY24 and rise another 6% in FY25 to $7.01 billion.
Image Source: Zacks Investment Research
Lululemon Q1 Review
Intriguingly, Lululemon easily surpassed its fiscal first-quarter earnings last Thursday with Q1 EPS coming in at $2.28 and 16% above expectations of $1.97 a share. Lululemon’s strong quarter was also driven by Asia with the company stating its Greater China revenue soared 79% YoY.
Stronger revenue from China led to Lululemon surpassing total sales estimates for Q1 by 4% at $2 billion. Even better was Lululemon’s quarterly growth with earnings jumping 54% from a year ago and sales up 24%.
Image Source: Zacks Investment Research
What made Lululemon’s strong quarter more intriguing was the company issuing better-than-expected guidance. This has been a rarity among retailers as consumers remain cautious in their spending. However, the fitness and yoga-inspired athleisure company continues to boast its loyal customer base.
According to Zacks estimates Lululemon’s annual earnings are now expected to soar 18% in its current fiscal 2024 at $11.88 per share compared to EPS of $10.07 in FY23. Plus, fiscal 2025 earnings are projected to climb another 15% at $13.70 per share.Total sales are forecasted to jump 17% in FY24 and rise another 13% in FY25 to $10.72 billion.
Image Source: Zacks Investment Research
Takeaway
Post earnings, Ralph Lauren stock currently lands a Zacks Rank #3 (Hold) with Lululemon sporting a Zacks Rank #2 (Buy). Both companies had blowout quarters attributed to China's reopening with expansive annual growth expected. At the moment Lululemon especially stands out because of its favorable guidance with other retail and apparel companies including Ralph Lauren still cautious of their operating environment.
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Time to Buy Lululemon (LULU) or Ralph Lauren (RL) Stock Post Earnings
Ralph Lauren (RL - Free Report) ) and Lululemon (LULU - Free Report) ) are two apparel leaders that investors may be eying after reporting strong quarterly results on May 25 and June 1 respectively.
With both premium designer companies beating top and bottom expectations let’s see if now is a good time to buy.
Ralph Lauren Q4 Review
Driven by strength in Asia the famous Polo brand retailer Ralph Lauren largely exceeded its fiscal fourth-quarter earnings expectations while also surpassing sales forecast. Ralph Lauren crushed its Q4 EPS estimates by 38% at $0.90 per share compared to expectations of $0.65 a share.
Attributed to Asia revenue jumping 13% year over year to $390 million, Ralph Lauren was able to beat top line estimates by 5% with total sales for Q4 coming in at $1.54 billion.
Image Source: Zacks Investment Research
Overall, Ralph Lauren posted strong quarterly growth as earnings climbed 83% YoY with sales up 1% from the prior-year quarter. With that being said the premium footwear and apparel leader does anticipate its operating environment will still be somewhat challenging in the upcoming quarter with the potential of slowing sales.
Still, Ralph Lauren’s earnings are now forecasted to rise 12% in its current fiscal 2024 and jump another 13% in FY25 at $10.62 per share. Sales are expected to be up 2% in FY24 and rise another 6% in FY25 to $7.01 billion.
Image Source: Zacks Investment Research
Lululemon Q1 Review
Intriguingly, Lululemon easily surpassed its fiscal first-quarter earnings last Thursday with Q1 EPS coming in at $2.28 and 16% above expectations of $1.97 a share. Lululemon’s strong quarter was also driven by Asia with the company stating its Greater China revenue soared 79% YoY.
Stronger revenue from China led to Lululemon surpassing total sales estimates for Q1 by 4% at $2 billion. Even better was Lululemon’s quarterly growth with earnings jumping 54% from a year ago and sales up 24%.
Image Source: Zacks Investment Research
What made Lululemon’s strong quarter more intriguing was the company issuing better-than-expected guidance. This has been a rarity among retailers as consumers remain cautious in their spending. However, the fitness and yoga-inspired athleisure company continues to boast its loyal customer base.
According to Zacks estimates Lululemon’s annual earnings are now expected to soar 18% in its current fiscal 2024 at $11.88 per share compared to EPS of $10.07 in FY23. Plus, fiscal 2025 earnings are projected to climb another 15% at $13.70 per share.Total sales are forecasted to jump 17% in FY24 and rise another 13% in FY25 to $10.72 billion.
Image Source: Zacks Investment Research
Takeaway
Post earnings, Ralph Lauren stock currently lands a Zacks Rank #3 (Hold) with Lululemon sporting a Zacks Rank #2 (Buy). Both companies had blowout quarters attributed to China's reopening with expansive annual growth expected. At the moment Lululemon especially stands out because of its favorable guidance with other retail and apparel companies including Ralph Lauren still cautious of their operating environment.