Trending Assets
Top investors this month
Trending Assets
Top investors this month
$LULU Q2 2022 Earnings
Lululemon was our July's "best idea" and reported Q2 earnings yesterday. We introduced our analysis with the following paragrah:
- Given the current volatile market fueled by inflation, recession fears and geopolitical tensions, we are more than ever interested in companies that set clear long-term goals and have an history of achieving those goals. It seems obvious, but few companies do it, and LULU is one rare example. While many companies are reducing their growth targets in the face of a possible recession, LULU is pursuing its growth strategy with continued focus and defying the macro outlook.
Q2 earnings were no exception! LULU reported earnings that beat Wall Street’s expectations, even as consumers grapple with high inflation.
Same store sales grew 23%, which beat StreetAccount’s estimate of 17.6%. Net sales rose 29% to $1.87bn. The company said that traffic remains strong both in stores (+30%) and online (+40%), even as surging inflation cramps consumers’ spending:
- “Despite the challenges around us in the macro-environment, guest traffic in our stores and on our e-commerce sites remains robust, which speaks to the strength of our multi-dimensional operating model,” Chief Financial Officer Meghan Frank said in a news release.
LULU continued brick-and-mortar expansion during the quarter, with 21 net new stores for a total of 600 locations.
Inventories were up 85% to $1.5bn compared to the same period last year, but the company said it was “under-inventoried” at the time due to supply chain bottlenecks. LULU said it is confident the inventory level will help it boost sales during the holiday shopping season.
For 2022, LULU expects net revenue to be in the range of $7.865bn to $7.940bn, up from the range of $7.610bn to $7.710bn it stated last quarter, representing a 3Y CAGR of approximately 26%. Adj diluted EPS are expected to be in the range of $9.75 to $9.90, higher vs. last quarter’s guidance of $9.35 to $9.50.
Shares are trading higher (c.+9%) after the news.
Already have an account?