Lululemon Stock Surges On Strong Q3 Results: Retail’s Extremely Bullish

Earnings per share came in at $2.87, beating estimates of $2.71.

Published: Dec 6, 2024, 11:06 PM IST

Shares of Lululemon Athletica Inc.(LULU) jumped more than 18% in morning trade on Friday after the athletic apparel maker’s better-than-expected third-quarter earnings, lifting retail sentiment.

Earnings per share came in at $2.87, beating estimates of $2.71. Its revenues were at
$2.4 billion, rising 9% year-over-year, and above the expected $2.36 billion quoted by analysts. The revenue growth came thanks to its performance in international markets.

"Our performance in the third quarter shows the enduring strength of lululemon globally, as we saw continued momentum across our international markets and in Canada,” Calvin McDonald, CEO said in a statement.

Its overall comparable sales increased by 4% or 3% on a constant dollar basis, with a strong performance seen in international markets. Its Americas comparable sales decreased 2%; while international sales increased 25%, or 22% on a constant dollar basis.

“We are committed to delivering on our Power of Three ×2 revenue target of $12.5 billion in 2026 and look forward to all that lies ahead,” Lululemon CFO Meghan Frank added.

Retail sentiment on the stock improved to ‘extremely bullish’ (95/100) from ‘neutral’ (50/100) a day ago. Message volumes continued to be in the ‘extremely high’ zone.

LULU sentiment meter and message volume on Dec 6 as of 11:05 a.m. ET

A recent Stocktwits poll about Lululemon showed nearly a third of retail investors think Lululemon’s undervalued now. The poll on Stocktwits asked users their thoughts on whether Lululemon’s valuation was justified following the Q3 earnings. More than half of the respondents are convinced of the company’s growth prospects.