Lululemon Athletica Reports Q4 EPS In-Line With Estimates

Written by Stocknews.com

Lululemon Athletica inc. (Nasdaq: LULU) late Wednesday posted decent fourth quarter numbers, but its 2017 outlook was much weaker than expected, sending its shares down 18% in aftermarket trading.

The Vancouver-based athletic apparel giant reported:

• Q4 earnings per share (EPS) of $1.00, which was $0.01 worse than the Wall Street consensus estimate of $1.01.
• Revenues rose 12.0% from last year to $789 million, also topping analysts’ view for $783.32 million.
• Comparable store sales (“comps”) rose 6% from last year, which was in-line with what the company had guided for. Comps are considered a key indicator of a retailer’s health, since they measure the year-over-year performance of stores open at least 12 months.

The real story of LULU’s latest report was its Q1 guidance, however.

• The company forecast Q1 EPS ranging from $0.25 to $0.27, which is much lower than the $0.39 that analysts project.
• Q1 revenues are seen between $510 to $515 million, also well below Wall Street’s $552.44 million estimate.
• ...LULU also sees comparable store sales declining in the low single digits for the first quarter.

For the full year, LULU’s outlook was similarly weak.

• The company forecast 2017 EPS of $2.26 to $2.36, much lower than the $2.56 that analysts expect.
• Its 2017 revenue forecast of $2.550 to $2.600 billion would also fall short of analysts’ $2.62 billion view.
• Full-year comps are seen rising in the low single digit range.

The company commented on its 2016 results and weak 2017 outlook via press release:

“2016 marks a milestone year where our successful execution against long-term strategies returned the company to positive operating income growth for the first time in three years. These results reflect our strong brand and solid foundation now in place to drive our future performance.”

Mr. Potdevin added: “Although we’ve had a slow start to 2017, our teams are passionately committed to delivering on our robust plans across product innovation, digital, North America and international as we realize our ambitious vision for the future.”

...Year-to-date, LULU had gained 1.86% prior to today’s report, versus a 5.39% rise in the benchmark S&P 500 index during the same period.

LULU currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #20 of 69 stocks in the Fashion & Luxury category.