Lululemon Athletica Inc. ($LULU) Earnings (Q2 FY22)

 Lululemon Athletica Inc. ($LULU) Earnings and Opinion:


Lululemon Athletica is a company in the Consumer Cyclical sector and operates in the Apparel Retail industry. The company designs, distributes, and retails athletic apparel and accessories for women and men. Lululemon Athletica was founded in 1998 and is currently based in Vancouver, Canada. The company made its debut on the stock market in August of 2007.

Lululemon Athletica Earnings Results:

  • Revenues of $1.87B beating expectations of $1.77B
  • Gross Profit of $1.06B beating expectations of $994M
  • Operating Profit of $391M beating expectations of $333M
  • Adjusted EPS of $2.20 beating expectations of $1.86
  • Guidance beat on all metrics for Q3 and FY22
Opinion:
Lululemon Athletica is currently soaring today after reporting earnings after the market closed yesterday. It's no surprise that the stock is moving higher, the earnings report was really solid. The stock traded lower during the session yesterday, as there was some concern that the company may not live up to the hype with the overall retail market slowing down. With the athletic gear being luxury, the target market is a lot of higher class individuals. This was a key factor in determining if the "rich" were still buying high end athletic gear. It seems that is still the case after a really solid earnings report. Guidance also looks solid for the time to come. If they are able to keep up this momentum, upside is definitely promising. As far as valuation goes, both the P/E ratio and P/S ratio sit a little high right now. I would take the case and say that it is probably overvalued right now. The current ratio sits at 1.91 and cash is a little outweighed by debt. Profitability measures are also in a good place with ROE and ROA metrics sticking out. Growth seems to decline a little bit, as Lululemon Athletica is becoming more and more established. In my opinion, my stock advisor seems to really like this one. I think it is such a hot commodity and seems like a social status to wear it. They have done a really good job branding and you have to give credit to where credit is due. I think it is slowing down and becoming more of established business in terms of growth. This isn't all that bad, but it may slow down returns and possibly implement a dividend. I am long Lululemon Athletica.

*Information from Yahoo Finance, CMLVIZ, Consensus Gurus

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