Lululemon’s (LULU, $168.30) ventures into menswear segment to drive growth
Shares of Lululemon soared more than 10% after the company disclosed its estimate beating fiscal fourth quarter earnings on Wednesday. Earnings per share came at $1.85 per share versus estimated $1.74 per share; revenue came at $1.17 billion versus and estimated $1.15 billion; and same store sales rose 16% in line with estimates. The quarter ending in February, net income rose to $218.5 million, or $1.65 per share, from $119.8 million, or 88 cents per share. Strong sales during the holiday quarter helped in a revenue rise of $1.17 billion from $928 million in the year-ago quarter. Achieved a operating margin of 21.5% during the quarter, two years ahead of schedule.
But the most exciting news for the quarter was its foray into the men’s wear segment proved to be highly successful.
The company, which so far specialised in women wear, disclosed that its recent foray into men’s apparel has been the most exciting segment for the year. And with just 20% market penetration, it is expected to be one of major growth driver for the company in years to come. Specifically, the men’s “bottoms” segment has been extremely profitable. To further enhance its brand presence, the company also recently announced former Philadelphia Eagles Superbowl quarterback Nick Foles as the brand’s first men’s ambassador.
Keeping women’s business at the core, the company also plans to widen its offering by focusing on some of the other segments within the apparel industry like office, travel, commute, outerwear and bras along with developing gear for the warm weather runs.
LULU sees its 50-day moving average cross bullishly above its 200-day moving average
The 50-day moving average for LULU moved above the 200-day moving average on December 16, 2024. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 56 cases where LULU's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that 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 346 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 286 cases where LULU Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for LULU moved out of overbought territory on December 18, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 42 similar instances where the indicator moved out of overbought territory. In of the 42 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on December 20, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on LULU as a result. In of 83 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for LULU turned negative on December 19, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 44 similar instances when the indicator turned negative. In of the 44 cases the stock turned lower in the days that followed. This puts the odds of success at .
LULU broke above its upper Bollinger Band on December 06, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring 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 Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. LULU’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock slightly better than average.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly 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 (3.964). P/E Ratio (31.575) is within average values for comparable stocks, (110.742). 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 (0.028). LULU's P/S Ratio (5.089) is very high in comparison to the industry average of (1.139).
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.
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General Information
a retailer of athletic apparels
Industry ApparelFootwearRetail