lululemon athletica inc. LULU has announced an upward revision to its revenues and earnings for the fourth quarter of fiscal 2024, driven by stronger-than-anticipated demand during the holiday season.
According to Meghan Frank, lululemon’s CFO, customer response to the brand’s product offerings during the holiday season had been particularly favorable, contributing to the company’s increased guidance. Revenues are now expected to grow 11-12%, reaching $3.56-$3.58 billion, up from the previous forecast of $3.48-$3.51 billion. When adjusting for the additional 53rd week in fiscal 2024, this equates to organic growth of 6-7%.
The leading athleisure retailer also raised its profit outlook, now projecting fourth-quarter earnings per share to range between $5.81 and $5.85, up from its previous guidance of $5.56 to $5.64.
lululemon anticipates a 30-basis-point increase in gross margin compared to the fourth quarter of fiscal 2023. This is a notable improvement over the prior guidance, which projected a decrease in gross margin by 20 to 30 basis points. Furthermore, the company expects deleverage in selling, general and administrative (SG&A) expenses to be 80 to 90 basis points, an improvement from its earlier estimate of 90 to 100 basis points.
LULU Positioned for Long-Term Success
lululemon’s strong brand positioning continues to be a key factor driving its success, both domestically and internationally. The company's commitment to offering high-performance, premium athletic apparel sets it apart in a competitive market. lululemon’s focus on innovation, with frequent updates to product lines and seasonal newness, ensures that its offerings remain relevant and appealing to its growing customer base.
The company’s successful global expansion is another critical factor fueling its growth. With a well-executed strategy in international markets, particularly in regions such as China, lululemon has seen strong acceptance of its brand and is effectively connecting with customers through localized marketing and product offerings. This international push is further supported by lululemon’s ability to optimize store locations and enhance the customer shopping experience.
lululemon's commitment to improving the customer experience, whether through its online or in-store channels, strengthens its position in the market. The company has demonstrated agility in responding to market trends and customer preferences, including enhancing its membership program and expanding its assortment to cater to diverse customer needs. As consumer demand for both athletic wear and lifestyle products continues to rise, lululemon’s strategic focus on product diversification, customer engagement and premium positioning places it well for sustained long-term growth.
The LULU stock, which currently carries a Zacks Rank #2 (Buy), has risen 38.7% in the past three months compared with the industry’s growth of 14.4%.
LULU Stock's Past 3 Months' Performance
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks are Wolverine World Wide WWW, V.F. Corporation VFC and Ralph Lauren Corporation RL.
Wolverine World Wide designs, manufactures and distributes a wide variety of casual and active apparel and footwear. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WWW’s current financial-year sales indicates a decline of almost 22% from the year-ago figure. The consensus mark for EPS indicates significant growth to 90 cents from 5 cents reported in the prior year. WWW has a trailing four-quarter earnings surprise of 17.03%, on average.
V.F. Corp designs, manufactures and markets branded apparel and related products in the United States and internationally. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 9.4%, on average.
The Zacks Consensus Estimate for V.F. Corp’s current fiscal-year sales and EPS implies declines of 8.4% and 34.1%, respectively, from the prior-year actuals.
Ralph Lauren, which designs, markets, and distributes lifestyle products, carries a Zacks Rank #2 at present. RL has a trailing four-quarter earnings surprise of 9.1%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year sales and earnings indicates growth of 3.6% and 13.9%, respectively, from the prior-year reported levels.
Free: 5 Stocks to Buy As Infrastructure Spending Soars
Trillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.
In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.
Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.V.F. Corporation (VFC) : Free Stock Analysis Report
Ralph Lauren Corporation (RL) : Free Stock Analysis Report
lululemon athletica inc. (LULU) : Free Stock Analysis Report
Wolverine World Wide, Inc. (WWW) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
