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Lululemon Corporate Media Analysis Report

Lululemon 2023 Quarterly Earnings Report

Lululemon’s (LULU) most recent 2023 10-Q reported $2.2 billion in total revenue which is an increase of 19% in revenue from the previous Q3, and their net income increased by 27% compared to the same period last year (corporate.lululemon.com 2023). This includes an increase of 9% sales growth in stores and 19% in their e-commerce business. These Q3 results exceeded Lululemon’s expectations overall.

Lululemon CEO Calvin McDonald said Black Friday this year was the “single biggest day” in the company’s history. “As we enter the holiday season, we are pleased with our early performance and are well-positioned to deliver for our guests in the fourth quarter,” McDonald said. “I am energized by the significant opportunities ahead,” (cnbc.com 2023).

Successful Q3 results were also due to LULU’s ongoing investments into their DC network and IT infrastructure to enhance the guest experience. A new shop app allowed Essentials Lululemon members to receive early access to Black Friday sales. LULU also announced that its board recently authorized a $1 billion share repurchase program, which reflects their optimism in the growth trajectory of their business (fool.com 2023).

Adding to their success in Q3, LULU’s inclusion in the S&P 500 resulted in their stock soaring to its highest share price in more than a year, a 10% jump (forbes.com 2023). During the Q3 earnings call, Lululemon Chief Financial Officer Meghan Frank also reported success in several areas including new stores and increased revenue is several product categories.

“During the quarter, we opened fourteen new stores and completed eight optimizations. In our digital channel, revenues totaled 908.1 million or 41% of total revenue. Within North America, revenue increased 12% versus last year. Within international, we saw 49% increase versus last year, with Greater China increasing 53%,” said Frank (fool.com 2023).

Business media analysis of LULU’s Q3 earnings report resulted in mostly positive, but with some neutral to negative sentiment; with three media outlets reporting positive feedback, one neutral and one negative. Most analysts agree that LULU is a strong buy with a strong Q4 outlook. However, Raymond James analysts downgraded shares of LULU after their Q3 report from strong buy to “outperform” due to the softening US consumer demand for high-priced athletic wear (finance.yahoo.com 2023).

Wells Fargo also downgraded the company but left the price target unchanged due to competitors having a wave of promotions across athleisure, especially amid the holiday season. This resulted in more neutral sentiment since Wells Fargo still held onto stock price targets for LULU (finance.yahoo.com 2023).

Positive sentiment came from Oppenheimer Senior Analyst Brian Nagel when he joined Yahoo Finance to discuss how Lululemon is a company on the rise. “Overall, the consumer continues to hold up really well. I have been through a number of quarterly reports over the last few weeks…it seemed like there was a bit of consumer weakness in October, some of that was weather driven – it is too warm,” Brian explained. “But with Lululemon we are seeing consistency with the consumer, when there’s reason to spend, they are showing up,” (finance.yahoo.com 2023).

Barclay’s Discretionary Senior Analyst Adrienne Yih maintained her strong buy rating and raised her price target on LULU after their Q3 report. She explained LULU’s success to Yahoo Finance, “The secret sauce is really in this continued long-term investment in the 3, 4, 5-year innovation,” (finance.yahoo.com 2023). “They never stop innovating.”

Overall, the media’s news articles mirrored LULU’s positive Q3 quarterly report with hopes for a strong Q4, which is planned for release in late March 2024.

“This was another strong quarter for Lululemon as our innovative product offerings and community activations continued to powerfully resonate with our guests globally,” stated Lululemon CEO Calvin McDonald (corporate.lululemon.com 2023).

WORK CITED

“Analysts Lift Lululemon Price Target Following Strong Q3 Beat.” Business Insider, Business Insider, 2023, markets.businessinsider.com/news/stocks/analysts-lift-lululemon-price-target-following-strong-q3-beat-1032886608.

Fonrougegab. “Lululemon Shares Fall as Retailer Gives Tepid Holiday Outlook despite Strong Start to Shopping Season.” CNBC, CNBC, 8 Dec. 2023, www.cnbc.com/2023/12/07/lululemon-lulu-earnings-q3-2023.html.

Francis, Don. “Lululemon Athletica: Barclays Analyst Raises Price Target by 10.4% on Strong Buy Rating.” WallStreetZen, 9 Dec. 2023, www.wallstreetzen.com/news/lululemon-athletica-barclays-analyst-raises-price-target-by-10-4-on-strong-buy-rating.

“Lululemon Athletica Inc. (Lulu) Stock Price, Quote & News.” Stock Analysis, 2023, stockanalysis.com/stocks/lulu/.

“Lululemon Athletica Inc.. Announces Third Quarter Fiscal 2023 Results Board of Directors Authorizes $1.0 Billion Stock Repurchase Program.” Lululemon, 2023, corporate.lululemon.com/media/press-releases/2023/12-07-2023.

“Lululemon Has a ‘Secret Sauce’: Analyst Explains What It Is.” Yahoo! Finance, Yahoo!, 2023, finance.yahoo.com/video/lululemon-secret-sauce-analyst-explains-163315362.html?fr=sycsrp_catchall.

“Lululemon Shows No Real Signs of Slowing down: Analyst.” Yahoo! Finance, Yahoo!, 2023, finance.yahoo.com/video/lululemon-shows-no-real-signs-223218784.html.

“Lululemon Stock Downgraded as Shoppers Seek out Value Deals.” Yahoo! Finance, Yahoo!, 2023, finance.yahoo.com/video/lululemon-stock-downgraded-shoppers-seek-154246454.html.

MSN, 2023, www.msn.com/en-us/money/topstocks/lululemon-shares-are-trading-lower-after-the-company-reported-q3-financial-results-and-issued-guidance/vi-AA1ldx3t.

Saul, Derek. “Lululemon Stock Rallies to 52-Week High after Joining S&P 500.” Forbes, Forbes Magazine, 17 Oct. 2023, www.forbes.com/sites/dereksaul/2023/10/16/lululemon-stock-rallies-to-52-week-high-after-joining-sp-500/?sh=12111eda1191.

Team, Trefis. “Lululemon Stock up 57% This Year, Where Is It Headed?” Forbes, Forbes Magazine, 21 Dec. 2023, www.forbes.com/sites/greatspeculations/2023/12/21/lululemon-stock-up-57-this-year-where-is-it-headed/?sh=53f33411241b.

Transcribing, Motley Fool. “Lululemon Athletica (Lulu) Q3 2023 Earnings Call Transcript.” The Motley Fool, The Motley Fool, 8 Dec. 2023, www.fool.com/earnings/call-transcripts/2023/12/08/lululemon-athletica-lulu-q3-2023-earnings-call-tra/.

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