Lululemon Athletica inc. (NASDAQ:LULU) will release its quarterly report on Thursday, and for the first time in a long while, investors aren’t comfortable in their assessment of the company’s future potential. Although most expect the yoga retailer’s rapid sales growth to continue, Lululemon Athletica inc. (NASDAQ:LULU) earnings could dip from year-ago levels due to some unusual circumstances that the company has faced recently.
Stats on Lululemon
Analyst EPS Estimate | $0.35 |
Change From Year-Ago EPS | (10.3%) |
Revenue Estimate | $343.1 million |
Change From Year-Ago Revenue | 21% |
Earnings Beats in Past 4 Quarters | 4 |
Source: Yahoo! Finance.
Will Lululemon earnings feel the burn this quarter?
Analysts have restored their confidence about Lululemon Athletica inc. (NASDAQ:LULU) earnings lately, boosting their July quarter estimates by $0.02 per share and their full-year projections by a penny per share. Yet the stock has fallen back from its spring highs, losing more than 10% since early June.
Nearly all of those losses came in the wake of Lululemon’s first-quarter earnings report. On the financial front, the news seemed good, as same-store sales rose 7%, rebounding from recall-related concerns. Yet despite 21% higher overall revenue, earnings were largely flat from year-ago levels. Even worse, CEO Christine Day announced she would leave the company, raising the added difficulty of a leadership change even as Lululemon Athletica inc. (NASDAQ:LULU) already faces the challenges of helping its business bounce back.
Moreover, even after the recall, Lululemon still faces some concerns about whether its business is back up to snuff. Complaints about post-recall orders have come in, raising new questions about quality control and emboldening both NIKE, Inc. (NYSE:NKE) and Under Armour Inc (NYSE:UA) to take steps toward poaching Lululemon Athletica inc. (NASDAQ:LULU)’s customers. Under Armour Inc (NYSE:UA)’s Studiolux Quattro collection represents a clear attempt to mimic the success that Lululemon achieved in wooing female customers, and NIKE, Inc. (NYSE:NKE) has a strong set of endorsement partnerships with female athletes that help drive sales.