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Lululemon Q2 Earnings Soar, Q3 Estimate Stronger: A Look at the Company’s Impressive Quarter
Lululemon Athletica Inc. (LULU) recently reported its financial results for the second quarter of fiscal year 2023. According to the company’s financial statements, Lululemon’s earnings per share (EPS) for the quarter ended August 31, 2023, was $1.97, beating Wall Street estimates of $1.86. This represents a significant increase from the prior quarter’s EPS of $1.15, and a considerable year-over-year increase of 8%.
The strong second quarter was driven by strong performance in the company’s core categories. The company experienced strong growth in its men’s and women’s apparel businesses, as well as its accessories categories. On a year-over-year basis, the company’s total revenue increased by 17% to $1.1 billion. This strong performance contributed to a 6.3% increase in comparable sales and a 16% increase in total operating income.
The positive momentum is expected to continue in the third quarter, with EPS estimates of $2.53 for the period ending November 30, 2023. This represents a substantial year-over-year increase of 12.5% from the prior year. Investors are likely to keep a close eye on the company’s financial performance in the coming months, as the company continues to benefit from strong consumer demand for its products.
Looking ahead, analysts are optimistic about the company’s long-term growth prospects, particularly given the success of its recently launched subscription-based loyalty program. This program allows customers to earn points and discounts in exchange for their purchases, which should help to drive increased sales and profitability for the company. Additionally, the company is focusing on expanding its product categories, such as performance apparel and footwear, which should further help to sustain its long-term growth trajectory.The Canadian apparel giant Lululemon Athletica Inc. (LULU) reported strong second-quarter earnings on August 31, 2021. For the quarter ended August 29, 2021, the company earned an adjusted profit of $1.97 per share, beating the consensus estimate of $1.71 per share. Revenue for the period rose 22.3% year-over-year to $1.22 billion, topping estimates of $1.15 billion. Comparable store sales rose 23% on a constant dollar basis.
For the quarter ended May 30, 2021, the company reported net income of $594.5 million, or $3.71 per share, compared to $49.2 million, or $0.30 per share, reported for the prior-year quarter.
Joggers, hoodies, leggings, and outdoor jackets helped the company report strong results. Gross profit also increased 22.2% year-over-year during the quarter. The company also plans to open more stores this year than previously anticipated, as demand continues to be strong.
Looking ahead to the third quarter of 2023, Lululemon expects EPS to come in between $2.50 and $2.53. Analysts’ estimate stands at EPS of $2.51. Revenue is expected to be between $1.25 and $1.27 billion, compared to analysts’ projection of $1.24 billion.
The strong second-quarter performance is expected to help the company maintain its leading position in the athleisure market. Moreover, the company is well-positioned to benefit from consumers’ growing interest in health and wellness. We believe the company will be able to sustain its growth trajectory, backed by its strong brand, innovative product categories, and omni-channel presence.On August 31,2023, the Canadian athletic apparel company Lululemon reported its second quarter earnings results with an EPS of $1.97. This marks a 3.7% increase in earnings on a year-over-year basis and beat analyst estimates of $1.92. Revenue for the quarter was reported at $1.03 billion, up 16.4% from the previous year and slightly ahead of the $1.02 billion consensus expectation.
Operating income for the quarter increased to $279 million, up 42% from the prior year quarter, driven by an increase in gross margin and a decrease in SG&A expenses as a percentage of sales. Gross margin increased to 54.1%, up from 52.9% in the prior year quarter, driven primarily by a reduction in promotional activities. SG&A expenses as a percentage of sales decreased to 33.7%, down from 35.6% in the prior year quarter.
Looking ahead to the third quarter of 2023, Lululemon estimates earnings to be in the range of $2.50 to $2.53 per share on sales of $1.14 billion to $1.15 billion. This compares to the consensus estimates of $2.51 per share on sales of $1.13 billion.
“We continue to be encouraged by the momentum across our business in Q2 and our ability to drive balanced growth across our segments,” said Lululemon CEO Calvin McDonald. “We remain focused on delivering our growth strategy and investing for the future, while driving profitable growth and value creation for our shareholders.”
Overall, Lululemon delivered another solid quarter of growth despite the ongoing challenges associated with the Covid-19 pandemic. The combination of increased gross margin and decreased SG&A expenses enabled the company to report higher earnings than the consensus expectation. Going forward, management remains focused on delivering its long-term growth strategy and creating value for shareholders.
