Lululemon Tops Analysts Expectations for 6 Straight Quarters

The company’s revenue, same-store sales, and online sales grew during the second quarter. 

It’s been quite the year for Lululemon. The stock is up 64% year to date and has beat analyst expectations at nearly every turn. This continued last week when the company released its second-quarter earnings.

Lululemon experienced growth nearly across the board. CEO Calvin McDonald said the company is two years into its five-year growth plan and remains on track to meet its goals. Here are the highlights of the company’s second-quarter earnings:

  • Earnings: 96 cents per share, beating estimates of 89 cents per share
  • Revenue: $883.4 million, beating estimates of $845.3 million
  • Comparable sales growth: Up 17%, beating estimates of 12%

Here’s what happened during Q2

Many brick-and-mortar retailers are struggling right now but Lululemon just delivered its sixth straight quarter of exceeding analyst expectations. During the second quarter, Lululemon’s revenue increased by 22% year over year and its same-store sales increased by 10%. 

The company’s e-commerce business now accounts for 25% of its revenue. And its men’s line grew by 35% and actually outpaced growth in its women’s line. Plus, Lululemon management raised its guidance for the remainder of the year. 

The company now predicts that revenue will fall between $3.8 billion and $3.84 billion. If Lululemon can meet this target, it’ll be that much closer to reaching its goal of $4 billion in annual sales. 

Company executives also announced that they plan to open a second experiential store in the Mall of America. The new store would have many of the same features as the original Chicago location. The company’s flagship store has a restaurant, a meditation room, multiple workout studios, and routinely hosts events and moving screenings.   

Lululemon has more room to grow

Lululemon’s growth is especially impressive when you consider that it happened in spite of ongoing trade war fears. In fact, the company’s sales grew by 70% in China and it plans to open 15 new stores there. 

Inevitably, this begs the question of whether the stock is a buy. According to 26 analyst ratings, the stock is considered a moderate buy right now. The average rating for Lululemon is $204, which represents a 5% upside. 

Whether you choose to invest in Lululemon or not, the company is experiencing an incredible period of growth right now. Momentum is definitely on the company’s side and should only continue heading into the holiday months.