Lululemon Athletica (LULU 1.58%) is slated to report its results for the first quarter of fiscal 2022 (essentially the February through April period) after the market close on Thursday, June 2. An analyst conference call is scheduled for the same day at 4:30 p.m. ET.
The athletic apparel retailer is heading toward its release on a strong note. Last quarter, shares popped nearly 10%, driven by the quarter's earnings beating the Wall Street consensus estimate, along with top- and bottom-line guidance for both the first quarter and full year of fiscal 2022 coming in significantly higher than analysts had expected. Last quarter's revenue was in line with the Street's projection.
Moreover, Lululemon sprinted by Wall Street's earnings estimates in all four quarters of last fiscal year.
Long-term investors should keep focused on the company's results, rather than the market's reaction. The broader market has been struggling since late last year and high-valued growth stocks, a category that includes Lululemon, have been one of the spaces hardest hit.
Here's what to watch in Lululemon's upcoming first-quarter report.
Lululemon's key numbers
|Metric||Fiscal Q1 2021 Result||Lululemon's Fiscal Q1 2022 Guidance||Wall Street's Fiscal Q1 2022 Consensus Estimate||Wall Street's Projected Change|
|Revenue||$1.23 billion||$1.525 billion to $1.550 billion||$1.53 billion||24%|
|Adjusted earnings per share (EPS)||$1.16||$1.38 to $1.43||$1.43||23%|
For context, last quarter (essentially the November 2021 to January 2022 period), sales jumped 23% year over year to $2.13 billion, which hit Wall Street's expectation on target. The holiday quarter's growth was driven by a 32% surge in company-operated same-store sales and a 17% increase in direct-to-consumer revenue. Adjusted earnings per share (EPS) soared 31% to $3.37, topping the $3.28 analyst consensus estimate.
Mirror and athletic shoe updates
On the earnings call, investors can expect management to discuss its home-fitness business. On last quarter's call, chief financial officer Meghan Frank said that in fiscal 2022, the company expects that "Mirror will generate revenue in excess of 2021 and [earnings] dilution will improve."
Hopefully, management will give investors some idea about how consumers are responding to the company's first branded shoe. On March 22, Lululemon rolled out the Blissful running shoe for women. It's available online and in select stores across North America, Mainland China, and the United Kingdom.
The market looks ahead, so guidance will likely be a big factor in how the market reacts to Lululemon's upcoming report.
For the second quarter (essentially the May through July period), Wall Street is currently modeling for revenue to jump 18% year over year to $1.71 billion and adjusted EPS to increase 7% to $1.77. These growth estimates are more modest than usual because the company has very tough comparables. In the second quarter of 2021, its year-over-year revenue and adjusted EPS rocketed 61% and 123%, respectively.
Last quarter, management released its outlook for full-year fiscal 2022. Any significant change in this guidance will probably move the stock. For the year, management projects revenue of $7.49 billion to $7.615 billion, representing annual growth of 20% to 22%. It also expects adjusted EPS of $9.15 to $9.35, representing annual growth of 17% to 20%.