Lululemon Athletica (LULU) stock is up 10% after the athletic apparel retailer reported third-quarter financial results that beat Wall Street forecasts.
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The company known for its popular yoga pants reported earnings per share (EPS) of $2.87, which handily beat analysts’ consensus forecasts of $2.71. Revenue came in at $2.40 billion, which was ahead of the $2.36 billion expected on Wall Street. Sales rose 9% from a year earlier.
Management attributed the strong results to accelerating sales in foreign markets, adding that they are “pleased” with the start to the current holiday season. Lululemon has turned to international markets for growth, especially in China. The strategy appears to be paying off. International sales grew 25% year-over-year during Q3, while sales in the U.S. declined 2% during the quarter.
Bullish Guidance
For the current fourth quarter, which includes the year-end holidays, Lululemon is forecasting revenue of $3.48 billion to $3.51 billion, representing growth of 8% to 10% from a year ago. Analysts were expecting revenue of $3.50 billion, or growth of 9.1%.
The company is expecting earnings of $5.56 to $5.64 per share in the current quarter, the high-end of which is ahead of the $5.59 analysts had forecast for the company. Lululemon recently approved a $1 billion increase to its stock buyback program, saying it has $1.8 billion remaining in the current program.
LULU stock is down 33% this year.
Is LULU Stock a Buy?
The stock of Lululemon Athletica has a consensus Moderate Buy rating among 20 Wall Street analysts. That rating is based on 12 Buy, seven Hold, and one Sell recommendations issued in the last three months. The average LULU price target of $327.33 implies 5.07% downside from current levels.
