What Happened: Lululemon reported second-quarter revenue up 2% to $903 million, which beat the $842.49 million estimate. Adjusted earnings per share came in at 74 cents for the quarter, well ahead of the 55-cent estimate. Sales at company-owned stores were down 51% year over year to $287.2 million. Direct-to-consumer sales were up 155% year over year to $554.3 million.
Why It’s Important: Direct-to-consumer sales saw a large increase in the second quarter and also represented 61.4% of total sales, compared to making up 24.6% in last year’s second quarter.
“We’re pleased with our overall business results for the second quarter, as Lululemon increasingly lives into its Omni potential,” said CEO Calvin McDonald. “We are cautiously optimistic with regard to the second half of the year as we continue to navigate the uncertain environment."
No guidance was given for the third quarter or full year.
How Analysts Fared: Three analysts recently weighed in on Lululemon with ratings of Neutral, Overweight, and Outperform. Estimates for revenue from Wedbush and Piper Sandler of $915.3 million and $883.4 million for revenue came in pretty close to the company’s report.
The three analysts have price targets of $380, $365, and $400, all above today’s trading price.
Price Action: Shares of Lululemon were down 3% in Tuesday’s trading session, closing at $349.80. Shares were trading down another 4% to $336 in after-hours trading. The stock is up 56% in 2020 and hit a 52-week high of $399.90 last week.