The 10-second takeaway
For the quarter ended May 5 (Q1), Lululemon Athletica beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. GAAP earnings per share stayed the same.
Margins contracted across the board.
Lululemon Athletica recorded revenue of $345.8 million. The 24 analysts polled by S&P Capital IQ hoped for revenue of $341.5 million on the same basis. GAAP reported sales were 21% higher than the prior-year quarter's $285.7 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 24 earnings estimates compiled by S&P Capital IQ predicted $0.30 per share. GAAP EPS of $0.32 were the same as the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 49.4%, 560 basis points worse than the prior-year quarter. Operating margin was 19.1%, 650 basis points worse than the prior-year quarter. Net margin was 13.7%, 260 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $344.1 million. On the bottom line, the average EPS estimate is $0.35.
Next year's average estimate for revenue is $1.67 billion. The average EPS estimate is $2.00.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 1,038 members out of 1,369 rating the stock outperform, and 331 members rating it underperform. Among 362 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 268 give Lululemon Athletica a green thumbs-up, and 94 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 $73.20.
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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 recommends 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.
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