Lululemon Athletica shares plunged on Monday, after the activewear retailer revealed that profit margins were likely to have contracted substantially over the final quarter of the year.
Lululemon is expecting fourth quarter revenues growth between 25% and 27% year-over-year for the sales figure to be as high as $2.7 billion, slightly higher than its December projection. However, the company is anticipating gross margins to decrease between -0.9% and -1.1% , compared to its prior forecast of positive growth between +0.1% and +0.2%.
According to Lululemon, it would offset the fourth quarter margin narrowing with accelerated cost cuts. The company further said that it expects earnings to come in between $4.22 and $4.27 per share, compared to its December guidance of between $4.20 and $4.30 per share.
LULU may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 36 cases where LULU's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where LULU's RSI Oscillator exited the oversold zone, of 23 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on April 22, 2024. You may want to consider a long position or call options on LULU as a result. In of 89 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for LULU just turned positive on April 18, 2024. Looking at past instances where LULU's MACD turned positive, the stock continued to rise in of 43 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where LULU advanced for three days, in of 351 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
LULU moved below its 50-day moving average on March 22, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for LULU crossed bearishly below the 50-day moving average on March 22, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
The 50-day moving average for LULU moved below the 200-day moving average on April 22, 2024. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LULU declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for LULU entered a downward trend on April 22, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. LULU’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: LULU's P/B Ratio (11.468) is slightly higher than the industry average of (3.862). P/E Ratio (31.575) is within average values for comparable stocks, (100.955). Projected Growth (PEG Ratio) (1.450) is also within normal values, averaging (1.444). LULU has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.027). P/S Ratio (5.089) is also within normal values, averaging (2.003).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a retailer of athletic apparels
Industry ApparelFootwearRetail