Lululemon dazzles analysts with beat-and-raise quarter
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Lululemon (NASDAQ:LULU) drew strong praise on Wall Street with a reassuring earnings report and guidance update with the company's broad-based sales strength helping it to fend off margin headwinds. The retailer effectively shook off concerns of a post-pandemic letdown with consumer buying habits.
Morgan Stanley noted Lululemon Athletica (LULU) was one of the few softlines retailers to raise full-year guidance despite the macro and supply chain volatility. The firm backed its Overweight rating on LULU and said it reaffirmed its position as one of the best growth assets in the space.
BTIG reiterated a Buy rating on LULU as it credited the company for masterfully sidestepping macro concerns with a Q1 earnings beat.
Analyst Camilo Lyon: "With another strong quarterly performance, seemingly bypassing any hint of macro pressures, LULU is exhibiting exceptional execution, boosted by its exposure to a higher-earning consumer and the vast TAM opportunities in both NA and abroad. What's more, the innovation pipeline remains robust as evidenced by the early success of its footwear launch (Blissfeel shoe), golf and tennis specific product, this week's latest fabric introduction (SenseKnit designed for running), and forthcoming hiking specific gear over the coming weeks. Given LULU's steadfast consistency, ability to execute under varied macro environments, and ample liquidity ($649M in cash)."
BTIG lowered its price target on LULU to factor in more conservative valuation assumptions.
Elsewhere on Wall Street, B. Riley Securities lowered its price target to $377 from $440.
Shares of LULU rose 0.51% premarket to $304.11.
Dig into the Lululemon earnings call transcript.