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Category: Stock Market and Lululemon
Date: 12 December 2019 Stock Price: $221.26 We take a look at the 3rd quarter earnings for their 2019 fiscal year of Lululemon a sports apparel company with quarterly sales of over $900 million
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About Lululemon
lululemon athletica inc. (NASDAQ:LULU) is a healthy lifestyle inspired athletic apparel company for yoga, running, training, and most other sweaty pursuits, creating transformational products and experiences which enable people to live a life they love. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback.
Overview of Lululemon's 3rd quarter 2019 earnings report
The data below refers to the latest quarter's data unless specified otherwise
- Net sales: $916.138 million (up from $747.655 million from the same quarter of the previous year)
- Lululemon's net sales increase by 22.5% over the last 12 months
- Lululemon's net sales increase by 22.5% over the last 12 months
- Cost of goods sold : $411.094 million (up from $340.878 million for the same quarter of the previous year)
- Cost of goods sold increased by 20.5% over the last 12 months.
- Some margin expansion being experienced by Lululemon as revenue grew at a faster rate than their cost of sales for the 3rd quarter of their 2019 fiscal year
- Net income: $125.982 million (up from from $94.413 million for the same quarter of the previous year)
- Diluted earnings per share: $0.96 (up from $0.71 for the same quarter of the previous year)
- PE ratio: 57.5 (based on the earnings per share for the current quarter being reported for full fiscal year)
- Diluted weighted-average shares outstanding: 130.805 million (down from 133.077 million for the same quarter of the previous year)
- Cash and cash equivalents: $586.153 million
- Cash and cash equivalents per share: $4.48
- Cash and cash equivalents makes up 2.03% of Lululemon's current market capital
- Cash and cash equivalents makes up 20.52% of Lululemon's total assets
- Inventories: $627.102 million (up from $404.842 million for the same quarter of the previous year)
- Inventories makes up 21.96% of Lululemons total assets
- Inventories grew by 54.9% over the last year
- It is concerning to see Lululemons inventories build up so strongly with the value of their inventories increased by over 50% over the last 12 months
- Cash generated from operations: $95.106million
- Cash generated from operations per share: $0.73
- Total shareholders' equity of Lululemon's: $2.855 billion
- Shareholders' equity per share: $21.83
- Lululemon is trading at 10.12 times ist stockholders equity which is well outside the expected range of between 2 and 4 times that most firms tend to trade at
Lululemon's management commentary on the results and earnings guidance
VANCOUVER, British Columbia--(BUSINESS WIRE)--Dec. 11, 2019-- lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the third quarter of fiscal 2019.
Calvin McDonald, Chief Executive Officer, commented: "We're proud of the continued momentum in our business as we live into our vision to be an experiential brand. We are successfully executing on our Power of Three growth plan as we create authentic connections with new and existing guests around the world. I'd like to thank our amazing teams for achieving this strong level of performance."
Calvin McDonald, Chief Executive Officer, commented: "We're proud of the continued momentum in our business as we live into our vision to be an experiential brand. We are successfully executing on our Power of Three growth plan as we create authentic connections with new and existing guests around the world. I'd like to thank our amazing teams for achieving this strong level of performance."
Updated Outlook
For the fourth quarter of fiscal 2019, we expect net revenue to be in the range of $1.315 billion to $1.330 billion based on a total comparable sales increase in the low double digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of $2.10 to $2.13 for the quarter. This guidance assumes 131 million diluted weighted-average shares outstanding and a 28.5% tax rate. The guidance does not reflect potential future repurchases of the Company's shares.
For the full fiscal 2019, we now expect net revenue to be in the range of $3.895 billion to $3.910 billion based on a total comparable sales increase in the mid teens on a constant dollar basis. Diluted earnings per share are expected to be in the range of $4.75 to $4.78 for the full year, based on a 28% effective tax rate. The guidance assumes 131 million diluted weighted-average shares outstanding. The guidance does not reflect potential future repurchases of the Company's shares.
The guidance and outlook forward-looking statements made in this press release are based on management's expectations as of the date of this press release and the Company undertakes no duty to update or to continue to provide information with respect to any forward-looking statements or risk factors, whether as a result of new information or future events or circumstances or otherwise. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below.
For the fourth quarter of fiscal 2019, we expect net revenue to be in the range of $1.315 billion to $1.330 billion based on a total comparable sales increase in the low double digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of $2.10 to $2.13 for the quarter. This guidance assumes 131 million diluted weighted-average shares outstanding and a 28.5% tax rate. The guidance does not reflect potential future repurchases of the Company's shares.
For the full fiscal 2019, we now expect net revenue to be in the range of $3.895 billion to $3.910 billion based on a total comparable sales increase in the mid teens on a constant dollar basis. Diluted earnings per share are expected to be in the range of $4.75 to $4.78 for the full year, based on a 28% effective tax rate. The guidance assumes 131 million diluted weighted-average shares outstanding. The guidance does not reflect potential future repurchases of the Company's shares.
The guidance and outlook forward-looking statements made in this press release are based on management's expectations as of the date of this press release and the Company undertakes no duty to update or to continue to provide information with respect to any forward-looking statements or risk factors, whether as a result of new information or future events or circumstances or otherwise. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below.
Lululemon (NASDAQ: LULU) stock price history
The image below shows the stock price history of Lululemon for the last 5 years, and its been a very very good time for Lululemon stockholders. 5 years ago the stock was trading at $52.90 and its currently trading at $221.62. That's a whopping 318.9% return over the last 5 years. No stockholder will ever say no to those kind of returns.
The stock of Lululemon is trading at a lost closer to its 52 week high of $235.50 than it is to its 52 week low of $110.71 which to us is a clear indication that the short term sentiment and momentum of Lululemon stock is very positive at this point in time.
The stock of Lululemon is trading at a lost closer to its 52 week high of $235.50 than it is to its 52 week low of $110.71 which to us is a clear indication that the short term sentiment and momentum of Lululemon stock is very positive at this point in time.
Recent coverage of Lululemon
The extract below covers the latest regarding Lululemon as obtained from TheStreet.com .
Lululemon Athletica's third-quarter report was overshadowed by soft fourth-quarter guidance, sending the stock down. But analysts are looking past Q4 and, measured by their price targets, they're even getting more bullish. The Vancouver athleisure retailer's stock fell 5.8% to $219.60 a share Thursday after Wednesday's earnings report.
Earnings per share came in at 96 cents, up 35% from 71 cents in the year-earlier quarter. The latest result beat analysts' estimates of 94 cents, as measured by a FactSet survey.Total revenue advanced 23% to $916 million, beating Wall Street estimates of $899 million. Comparable sales grew 16%, beating the consensus of 14%.
Read the original article here
Lululemon Athletica's third-quarter report was overshadowed by soft fourth-quarter guidance, sending the stock down. But analysts are looking past Q4 and, measured by their price targets, they're even getting more bullish. The Vancouver athleisure retailer's stock fell 5.8% to $219.60 a share Thursday after Wednesday's earnings report.
Earnings per share came in at 96 cents, up 35% from 71 cents in the year-earlier quarter. The latest result beat analysts' estimates of 94 cents, as measured by a FactSet survey.Total revenue advanced 23% to $916 million, beating Wall Street estimates of $899 million. Comparable sales grew 16%, beating the consensus of 14%.
Read the original article here
Lululemon (NASDAQ: LULU) latest stock valuation
Based on the latest earnings report from Lululemon as well as their fiscal guidance what do we value their stock at? Based on Lululemon's earnings reported and the fiscal guidance provided our valuation model provides a target price (full value) price of $146.60 a Lululemon stock.
We therefore believe that the stock is grossly overvalued. We usually recommend that long term fundamental and value investors look to enter a stock at least 10% below our target price which in this case is $146.60. A good entry point into Lululemon would therefore be at $131.90 or below. Since the stock of Lululemon is trading at well above our target price we rate the stock of Lululemon as avoid. We expect it to pull back strongly from current levels to levels closer to our target price in coming weeks and months.
We therefore believe that the stock is grossly overvalued. We usually recommend that long term fundamental and value investors look to enter a stock at least 10% below our target price which in this case is $146.60. A good entry point into Lululemon would therefore be at $131.90 or below. Since the stock of Lululemon is trading at well above our target price we rate the stock of Lululemon as avoid. We expect it to pull back strongly from current levels to levels closer to our target price in coming weeks and months.
Next earnings release of Lululemon
It is expected that Lululemon will release their 4th quarter and full fiscal 2019 earnings report in early March 2020