Lululemon Athletica (LULU), a high-end yoga and athleisure clothing brand, will release its Q2 financials on August 29. Wall Street analysts expect the company to post earnings per share of $2.94 in Q2, up 10% from the prior-year quarter. Meanwhile, analysts expect revenues of $2.41 billion, reflecting a 9% year-over-year increase, according to TipRanks’ data.
As we approach Q2, it’s important to highlight Lululemon’s ongoing challenges, with the stock down 47% year-to-date and 26% over the past year. This downward trajectory reflects declining investor sentiment, despite the company’s nine consecutive earnings and revenue beats. A key factor in this decline is stagnating U.S. sales.
According to TipRanks’ Bulls Say, Bears Say tool, bears pointed out that Lululemon is grappling with execution issues, contributing to the nearly 50% YTD drop. These challenges are compounded by unmet financial expectations, a North American market slowdown, and reliance on China for growth. Additionally, the pause in “Breezethrough” leggings sales raises concerns about internal design issues, further impacting the company’s innovation efforts.
What Does Lululemon Q2 Website Visits Reflect?
Investors can use TipRanks’ Website Traffic Tool to gain insights into a company’s upcoming earnings report. The tool offers information on how a company’s website domain performed over a specific time frame. Lululemon’s Q2 website data reflects a mixed trend.
According to TipRanks’ Website Traffic tool, total estimated visits to lululemon.com grew by 27.76% year-over-year but declined 25% sequentially in Q2.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 10.48% move in either direction.
Is Lululemon Athletica a Buy?
Overall, the Street has a Moderate Buy consensus rating on LULU, alongside an average price target of $340.17. However, analysts’ views on the stock may change once the company reports its Q2 earnings tomorrow.
