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Following is a list of company earnings scheduled for release March 29-April 2, along with an earnings preview for select companies. Next week’s earnings are probably not much significant for major market movements as earnings almost ended, but it is adequate to gauge investors’ sentiment.
IN THE SPOTLIGHT: LULULEMON ATHLETICA
The Vancouver-based healthy lifestyle-inspired athletic apparel company Lululemon Athletica is expected to report its fourth-quarter earnings of $2.48 per share, which represents year-over-year growth of about 9% from $2.28 per share seen in the same quarter a year ago. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 12%.
Lululemon would post year-over-year revenue growth of about 19% year-on-year to around $1.7 billion.
“We see upside to both Street 4Qe EPS & mgmt. guidance, as revenue, GM, & SG&A assumptions appear conservative. The recent pullback may make for an attractive entry point, though we acknowledge valuation remains full at 46x ’21e P/E. Stay Equal-weight for now, & trim price target to $386 on rising rates/WACC,” said Kimberly C Greenberger, equity analyst at Morgan Stanley.
“Expanded eComm capabilities, improved supply chain, better inventory management, and product initiatives led to enviable ’18-’19 performance and a robust return to pre-COVID-19 levels in 3Q20, making +mid-high-teens comps seem normal. Still, the current valuation appears extreme, so we stay EW. Compelling LT and post-COVID-19 growth opportunity driven by three factors: international expansion (maybe less evident in ‘20e given COVID-19 outbreak), digital growth, and product innovation. LULU dominates the NA athletic yoga apparel category due to its unique brand positioning and fashionable products, and its athleisure focus is further advantaged in a COVID-19 affected world.”
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