Deprecated: Function create_function() is deprecated in /nas/content/live/tipranksblog/wp-content/plugins/php-code-widget/execphp.php on line 62

WordPress database error: [Table 'wp_tipranksblog.wp_responsive_menu' doesn't exist]
SELECT * FROM wp_responsive_menu /* From [blog.tipranks.com/lululemon-skids-6-as-3q-profit-expected-to-drop/] in [/nas/content/live/tipranksblog/wp-content/plugins/responsive-menu/app/Database/Database.php:12] */

Lululemon Skids 6% As 3Q Profit Expected To Drop - TipRanks Financial Blog
TipRanks

Notifications

Lululemon Skids 6% As 3Q Profit Expected To Drop

Shares of Lululemon Athletica dropped 6.2% in after-hours on Tuesday after the company said that it is “cautiously optimistic with regard to the holiday season” and expects 3Q profit to plunge as much as 20%.

Meanwhile, Lululemon (LULU) reported 2Q results which exceeded analysts’ expectations fueled by a 155% surge in direct-to-consumer sales. However, the The yoga wear and athletic apparel retailer anticipates 3Q adjusted profit to decline up to 20% year-over-year due to higher marketing expenses.

Lululemon’s 2Q revenues rose 2% to $902.9 million year-on-year, surpassing analysts’ expectations of $857.1 million. The retailer’s adjusted EPS plunged 23% to $0.74, beating Street estimates of $0.56 during the same comparative period. Profit dropped mainly due to increased cost of revenue and higher SG&A expenses because of temporary store closures, reduced operating hours, and limited guest occupancy amid the COVID-19 pandemic. (See LULU stock analysis on TipRanks).

Following its earnings, Guggenheim analyst Robert Drbul raised the stock’s price target to $400 (14.6% upside potential) from $350 and reiterated a Buy rating. Drbul stated that “We continue to view LULU as one of the strongest brands in retail, with favorable secular tailwinds today (health/wellness, casualization, increased fitness activity, including at-home via MIRROR).”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 17 Buys and 10 Holds. With shares up nearly 51% so far this year, the average price target of $369.17 implies further upside potential of about 5.5%.

Related News:
Lululemon Earnings: RBC Says LULU ‘Rightly’ Expensive, Boosts PT 25%
Guess Spike 12% After 2Q Sales Beat The Street
Shoe Carnival Looks Like a Long-Term Winner, Says Analyst

Amit Singh
Amit Singh has over eight years of strong experience (both sell-side and buy-side) in analyzing financial reports and filings as well as identifying strategic investment opportunities. Over the years, Amit has covered various industries and geographies, with a primary focus on consumer staples and the consumer discretionary sector. Amit’s background spans evaluating company portfolios, building complex financial models, writing financial articles, and identifying the overall financial worth of companies. He has a post-graduate diploma in finance.

Leave a Reply

Your email address will not be published. Required fields are marked *

Leave a Reply

Your email address will not be published. Required fields are marked *