Lululemon Stock Stretches Higher: What's Going On?

Lululemon Athletica Inc LULU shares are trading higher Wednesday after the athleisure company reported better-than-expected financial results and issued strong guidance. 

• Q4 Revenue: $2.77 billion beat estimates of $2.7 billion
• Q4 EPS: $4.40 beat estimates of $4.26

Revenue came in up 30% year-over-year (29% in North America, 35% internationally). Comparable sales increased 27% and gross margins totaled 55.1%. 

Lululemon said its results were driven by its innovative products, powerful guest experiences and strategic market expansion. 

The company opened 32 new stores during the quarter bringing its total store count up to 655.

"Our ability to exceed our annual revenue target in a dynamic operating environment is a testament to the enduring strength of the lululemon brand. Looking ahead, we remain optimistic regarding our ability to deliver sustained growth," said Meghan Frank, CFO of Lululemon.

Outlook: Lululemon sees first-quarter revenue of $1.89 billion to $1.93 billion versus estimates of $1.85 billion. The company expects EPS to be in a range of $1.93-$2.

Full-year 2023 revenue is expected to be in a range of $9.3 billion to $9.41 billion and EPS is expected to be between $11.50 and $11.72 per share.

Related Link: Lululemon Q4 Earnings Highlights: Revenue Beat, EPS Beat, Guidance Update And More

Analyst Changes: 

• Keybanc analyst Noah Zatzkin maintained Lululemon with an Overweight and raised the price target from $375 to $390.
• Telsey Advisory Group analyst Dana Telsey reiterated Lululemon with an Outperform and a $425 price target.
• Citigroup analyst Paul Lejuez upgraded Lululemon from Neutral to Buy and raised the price target from $350 to $440.
• Stifel analyst Jim Duffy maintained Lululemon with a Buy and raised the price target from $450 to $460.
• Credit Suisse analyst Michael Binetti maintained Lululemon with an Outperform and raised the price target from $410 to $420.

LULU Price Action: Lululemon shares were up 16.3% at $372.57 at time of publication, according to Benzinga Pro.

Photo: m01229 from Flickr.