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Lululemon Athletica (LULU)
:LULU
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Lululemon Athletica
(NASDAQ:LULU)86Outperform
Positive Factors
Growth and Market Performance
LULU is added to the Top 5 Outperforms List, indicating increased confidence in the company's future performance.
Product Innovation
Product issues were contained to 2024, and new innovations are expected to improve LULU's market performance.
Negative Factors
Sales and Revenue Concerns
Rising levels of markdowns and newer styles hitting the sales rack quickly raise concerns.
Lululemon Athletica (LULU) vs. S&P 500 (SPY)
Market Cap
$43.82B
Dividend YieldN/A
Average Volume (3M)1.57M
Price to Earnings (P/E)25.2
Beta (1Y)0.75
Revenue Growth10.84%
EPS Growth76.07%
CountryUS
Employees38,000
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)13.85
Shares Outstanding116,667,564
10 Day Avg. Volume1,527,742
30 Day Avg. Volume1,565,593
Financial Highlights & Ratios
PEG Ratio0.33
Price to Book (P/B)N/A
Price to Sales (P/S)3.96
Price to Cash Flow (P/CF)33.50
P/FCF Ratio82.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$422.79Price Target Upside20.96% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering21
Lululemon Athletica Business Overview & Revenue Model
Company DescriptionFounded in 1998 and headquartered in Vancouver, Canada, Lululemon Athletica, Inc. is an athletic apparel retailer. The company designs, distributes, and retails athletic apparel and accessories for women, men, and female youth. The company operates through two business segments: Company-Operated Stores, which comprises of lululemon and ivivva brands; and Direct to Consumer, which is its e-commerce business.
How the Company Makes MoneyLululemon Athletica generates revenue primarily through the sale of its apparel and accessories. The company's key revenue streams include its network of physical retail stores, a rapidly growing e-commerce platform, and direct-to-consumer sales. Lululemon's product offerings include yoga pants, shorts, tops, jackets, and accessories like bags and water bottles. The company's e-commerce channel has been a significant growth driver, allowing it to reach a global audience and complement its brick-and-mortar presence. Additionally, Lululemon frequently introduces product innovations and limited-edition collections, which help drive customer interest and sales. The company also benefits from strategic partnerships and collaborations that enhance its brand visibility and expand its market reach.
Lululemon Athletica Financial Statement Overview
Summary
Lululemon Athletica demonstrates strong financial health with impressive profitability, prudent balance sheet management, and robust cash flow generation. The company shows consistent revenue growth and maintains operational efficiency, making it a financially sound entity in the retail industry.Income Statement
Lululemon Athletica shows strong performance in its TTM (Trailing-Twelve-Months) with a gross profit margin of approximately 58.85%, indicating efficient cost management and healthy profitability. The net profit margin stands at 17.05%, reflecting strong bottom-line performance. Revenue growth rate from the previous year is 5.86%, showcasing consistent growth. The EBIT margin is 23.91%, and the EBITDA margin is 26.6%, underlining strong operational efficiency.92
Very Positive
Balance Sheet
The balance sheet indicates a robust financial position with a debt-to-equity ratio of 0.35, reflecting conservative leverage. A return on equity (ROE) of 39.92% suggests efficient use of equity capital. The equity ratio of 68.16% demonstrates a solid equity base, ensuring financial stability.88
Very Positive
Cash Flow
Cash flow analysis reveals a stable position with an operating cash flow to net income ratio of 1.30, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is 0.92, showing effective cash conversion. Although the free cash flow growth rate is slightly negative at -3.02%, cash flow generation remains strong overall.85
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 10.18B | 9.62B | 8.11B | 6.26B | 4.40B | 3.98B | Gross Profit |
| 5.99B | 5.61B | 4.49B | 3.61B | 2.46B | 2.22B | EBIT |
| 2.43B | 2.13B | 1.33B | 1.33B | 819.99M | 889.11M | EBITDA |
| 2.71B | 2.59B | 2.02B | 1.60B | 1.00B | 889.11M | Net Income Common Stockholders |
| 1.74B | 1.55B | 854.80M | 975.32M | 588.91M | 645.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 881.32M | 2.24B | 1.15B | 1.26B | 1.15B | 1.09B | Total Assets |
| 2.08B | 7.09B | 5.61B | 4.94B | 4.19B | 3.28B | Total Debt |
| 0.00 | 1.40B | 1.07B | 881.05M | 798.68M | 739.96M | Net Debt |
| -881.32M | -840.69M | -84.53M | -378.82M | -351.84M | -353.54M | Total Liabilities |
| 638.74M | 2.86B | 2.46B | 2.20B | 1.63B | 1.33B | Stockholders Equity |
| 1.45B | 4.23B | 3.15B | 2.74B | 2.56B | 1.95B |
| Cash Flow | Free Cash Flow | ||||
| 1.59B | 1.64B | 327.81M | 994.61M | 574.11M | 386.27M | Operating Cash Flow |
| 2.26B | 2.30B | 966.46M | 1.39B | 803.34M | 669.32M | Investing Cash Flow |
| -784.02M | -654.13M | -569.94M | -427.89M | -695.53M | -278.41M | Financing Cash Flow |
| -1.37B | -548.83M | -467.49M | -844.99M | -80.79M | -177.17M |
Lululemon Athletica Technical Analysis
Negative
349.53
Price Trends
384.70
Negative
354.59
Negative
316.96
Positive
Market Momentum
-10.74
Positive
34.15
Neutral
29.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LULU, the sentiment is Negative. The current price of 349.53 is below the 20-day moving average (MA) of 375.43, below the 50-day MA of 384.70, and above the 200-day MA of 316.96, indicating a neutral trend. The MACD of -10.74 indicates Positive momentum. The RSI at 34.15 is Neutral, neither overbought nor oversold. The STOCH value of 29.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LULU.
Lululemon Athletica Risk Analysis
Lululemon Athletica disclosed 39 risk factors in its most recent earnings report. Lululemon Athletica reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lululemon Athletica Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
86 Outperform | $43.82B | 25.25 | 46.21% | ― | 10.84% | 76.07% | |
81 Outperform | $15.61B | 23.04 | 27.75% | 1.23% | 5.23% | 24.63% | |
74 Outperform | $114.37B | 23.89 | 34.67% | 1.95% | -4.77% | -5.99% | |
71 Outperform | $4.61B | 21.81 | 12.54% | 1.43% | -3.35% | -6.09% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
58 Neutral | $8.78B | ― | -27.21% | 1.60% | -8.42% | 57.91% | |
52 Neutral | $2.77B | ― | -6.76% | ― | -7.47% | -131.70% |
* Consumer Cyclical Sector Average
Performance Comparison
LULU
Lululemon Athletica
349.53
-99.01
-22.07%
COLM
Columbia Sportswear
84.36
5.12
6.46%
NKE
Nike
77.81
-18.03
-18.81%
RL
Ralph Lauren
250.45
74.17
42.08%
UA
Under Armour
6.43
-1.79
-21.78%
VFC
VF
23.45
7.97
51.49%
Lululemon Athletica Earnings Call Summary
Earnings Call Date: Dec 5, 2024 | % Change Since: 1.37% | Next Earnings Date: Apr 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, record-breaking Black Friday sales, and significant international expansion, while addressing challenges related to the Lululemon Studio business and increased SG&A expenses. The overall sentiment is positive with some caution due to macroeconomic factors.Highlights
Record-Breaking Black Friday
Black Friday was the single biggest day in company history, showing strength across both store and e-commerce channels.
Strong Revenue and Growth
Revenue increased 19% year-over-year, with comparable sales growing 9% in stores and 19% in e-commerce. Adjusted EPS increased 27%.
International Expansion Success
International revenue increased 49%, with Greater China increasing 53%.
Women's and Men's Business Growth
Women's business increased 19%, while Men's business grew 15%.
New Share Repurchase Program
A new $1 billion share repurchase program was authorized, reflecting optimism in growth.
Lowlights
Lululemon Studio Business Impairment
Recognized a post-tax asset impairment and other charges related to Lululemon Studio totaling $72.1 million due to stopping sales of Mirror hardware.
High SG&A Expenses
SG&A expenses were 38.2% of net revenue, up from 36.8% last year, reflecting strategic investments.
Conservative Q4 North America Guidance
Guiding for high single-digit growth in North America due to macroeconomic factors and 2/3 of the quarter still ahead.
Company Guidance
During the Lululemon Athletica Q3 2024 earnings call, the company provided comprehensive guidance, emphasizing a strong performance with several key metrics. Revenue for the quarter increased by 19% year-over-year to $2.2 billion, fueled by a 9% increase in store sales and a 19% rise in the e-commerce segment. Adjusted earnings per share rose by 27% compared to the same period last year. The company also reported a 53% increase in revenue from Greater China, contributing to a 49% growth in international markets. Lululemon's gross profit margin improved by 220 basis points to 58.1%, driven by lower freight costs. Inventory management was notable, with a 4% decrease in inventory value, setting expectations for flat to slightly down inventory by the end of Q4. The company issued guidance for Q4, projecting revenues between $3.135 billion and $3.170 billion, a 13% to 14% growth, and EPS in the range of $4.85 to $4.93. For the full fiscal year 2023, revenue is expected between $9.549 billion and $9.584 billion, marking an 18% increase, alongside a projected 70 basis points increase in adjusted operating margin.Lululemon Athletica Corporate Events
Business Operations and StrategyFinancial Disclosures
Lululemon Projects Strong Q4 Fiscal 2024 Revenue Growth
Positive
Jan 13, 2025
Lululemon Athletica has revised its revenue and earnings expectations for the fourth quarter of fiscal 2024, projecting net revenue to reach between $3.560 billion to $3.580 billion, marking an 11% to 12% growth from the previous year. This adjustment, attributed to strong product reception during the holiday season, also anticipates an increase in gross margin and a slight improvement in expenses management, positioning the company favorably in the competitive athletic apparel market.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.