Zinger Key Points
- Lululemon shares are down 4.44%, influenced by broader sector weakness following mixed earnings reports from Abercrombie and Foot Locker.
- Lululemon is set to release its Q2 earnings on Aug. 29, with analysts expecting $2.92 EPS and $2.409 billion in revenue.
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Lululemon Athletica Inc. LULU shares are trading lower Wednesday. The decline comes amid broader sector weakness, particularly following the earnings reports of other retail and athletic wear companies, such as Foot Locker Inc. FL and Abercrombie & Fitch Company ANF.
Both companies reported better-than-expected earnings but failed to inspire confidence across the sector, leading to a sell-off that impacted Lululemon as well.
What To Know: Lululemon is set to release its second-quarter earnings on Thursday, Aug. 29, after market close. Analysts expect the company to report earnings per share (EPS) of $2.92 and revenue of $2.409 billion.
Foot Locker and Abercrombie & Fitch also reported their fiscal 2024 second-quarter earnings before the market opened on Wednesday.
Foot Locker: The company posted a loss of five cents per share, which was better than analysts’ expectations of a seven cents per share loss.
Foot Locker also reported sales of $1.89 billion, slightly exceeding the $1.88 billion forecast. The company reaffirmed its adjusted EPS guidance for the 2024 fiscal year, projecting between $1.50 and $1.70.
During the quarter, Foot Locker opened five new stores but closed 41. Additionally, 14 stores were remodeled or relocated and 67 were updated to meet new design standards.
Abercrombie & Fitch: Abercrombie outperformed analyst estimates by reporting sales of $1.13 billion, surpassing the expected $1.10 billion, and an adjusted EPS of $2.50, above the $2.22 forecast. The company also anticipates third-quarter net sales to grow in the low double digits year-over-year.
Analyst Outlook: Despite the recent dip, analysts maintain a generally positive outlook on Lululemon.
Wedbush analyst Tom Nikic lowered his price target from $400 to $324 while maintaining an Outperform rating. Truist Securities analyst Joseph Civello maintains a Buy rating with a $310 price target.
The consensus analyst rating remains a Buy, with a price target of $387.72, indicating a potential upside of approximately 26.95%.
LULU Price Action: Lululemon’s stock closed Wednesday down 4.55% at $258.83, according to Benzinga Pro.
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