Lululemon (LULU) Q3 Earnings: What To Expect

Athletic apparel retailer Lululemon (NASDAQ:LULU) will be reporting results this Thursday afternoon. Here’s what to expect.

Lululemon missed analysts’ revenue expectations by 0.5% last quarter, reporting revenues of $2.53 billion, up 6.5% year on year. It was a slower quarter for the company, with full-year EPS guidance missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly.

Is Lululemon a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Lululemon’s revenue to grow 3.3% year on year to $2.48 billion, slowing from the 8.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.21 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Lululemon has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Lululemon’s peers in the apparel retailer segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Zumiez delivered year-on-year revenue growth of 7.5%, beating analysts’ expectations by 2%, and American Eagle reported revenues up 5.7%, topping estimates by 3.1%. Zumiez traded up 12.3% following the results while American Eagle was also up 14.6%.

Read our full analysis of Zumiez’s results here and American Eagle’s results here.

There has been positive sentiment among investors in the apparel retailer segment, with share prices up 10.5% on average over the last month. Lululemon is up 7% during the same time and is heading into earnings with an average analyst price target of $190.19 (compared to the current share price of $182.16).

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