The 10-second takeaway
For the quarter ended April 29 (Q1), Lululemon beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share expanded significantly.
Margins shrank across the board.
Lululemon reported revenue of $285.7 million. The 19 analysts polled by S&P Capital IQ predicted revenue of $274.1 million on the same basis. GAAP reported sales were 53% higher than the prior-year quarter's $186.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.32. The 17 earnings estimates compiled by S&P Capital IQ forecast $0.31 per share. GAAP EPS of $0.30 for Q1 were 30% higher than the prior-year quarter's $0.23 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 55.0%, 370 basis points worse than the prior-year quarter. Operating margin was 25.6%, 210 basis points worse than the prior-year quarter. Net margin was 15.3%, 260 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $292.9 million. On the bottom line, the average EPS estimate is $0.34.
Next year's average estimate for revenue is $1.37 billion. The average EPS estimate is $1.68.
The stock has a two-star rating (out of five) at Motley Fool CAPS. Among 362 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 252 give Lululemon a green thumbs-up, and 110 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lululemon is outperform, with an average price target of $78.56.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Lululemon. Motley Fool newsletter services have recommended buying shares of Lululemon. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.