The 10-second takeaway
For the quarter ended July 29 (Q2), Lululemon Athletica met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share grew significantly.
Gross margins shrank, operating margins contracted, net margins grew.
Lululemon Athletica logged revenue of $282.6 million. The 21 analysts polled by S&P Capital IQ predicted revenue of $286.2 million on the same basis. GAAP reported sales were 33% higher than the prior-year quarter's $212.3 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 $0.34. The 20 earnings estimates compiled by S&P Capital IQ averaged $0.31 per share. GAAP EPS of $0.39 for Q2 were 50% higher than the prior-year quarter's $0.26 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 55.1%, 240 basis points worse than the prior-year quarter. Operating margin was 24.8%, 320 basis points worse than the prior-year quarter. Net margin was 20.2%, 210 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $304.6 million. On the bottom line, the average EPS estimate is $0.36.
Next year's average estimate for revenue is $1.36 billion. The average EPS estimate is $1.76.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 1,002 members out of 1,330 rating the stock outperform, and 328 members rating it underperform. Among 359 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 266 give Lululemon Athletica a green thumbs-up, and 93 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lululemon Athletica is outperform, with an average price target of $74.80.
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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 Athletica. Motley Fool newsletter services recommend Lululemon Athletica. 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.