Lululemon courts lofty expectations ahead of earnings
Robert Way

Lululemon Athletica (NASDAQ:LULU) is due to report its fiscal third quarter earnings results after the bell on Thursday.
The analyst consensus for EPS and revenue stand at $1.96 and $1.81B, respectively, after a number of upward revisions in the 90 days prior to the report. The apparel manufacturer has beaten EPS expectations in 8 consecutive quarters, missing revenue estimates only once in the timeframe. 
Analysts are overwhelmingly bullish on the stock heading into the year-end, with the consensus reflecting a Buy rating on shares and price targets raised multiple times in recent weeks. For example, Piper Sandler called the stock an outlier in retail based upon its ability to court strong demand and maintain margins despite a promotional environment. Meanwhile, JP Morgan raised its outlook for the retailer based upon the bankâs positive channel checks and indications of superior inventory management.
Crucially, the stock is also seen as a major beneficiary from Black Friday sales as, even without many markdowns, demand was apparently robust. According to Morgan Stanley, Lululemonâs (LULU) traffic was âa clear standout across the mallâ on the sales weekend. Traffic data provider Placer.ai also indicated that while year over year visits to retail locations edged slightly lower from 2021 for the months of October and November, spending actually picked up. Spending for the first half of November rose 17% from 2021 and and 86% from 2019, according to the firm's data.
Commentary from management on holiday sales trends will likely be closely watched by both investors and analysts.
While shares of the Canadian apparel brand have edged slightly lower in 2022, the stock is running quite hot into earnings day. Shares have surged over 30% higher since the start of the calendar fourth quarter.
Read more on the earnings slate for Thursday.