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Factors to Decide lululemon's (LULU) Fate in Q4 Earnings
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lululemon athletica inc. (LULU - Free Report) is likely to witness top and bottom-line growth when it reports fourth-quarter fiscal 2021 results on Mar 29, after market close.
The Zacks Consensus Estimate for fiscal fourth-quarter sales is pegged at $2.13 billion, indicating a 23.4% increase from the prior-year quarter's reported figure. The Zacks Consensus Estimate for the company's fiscal fourth-quarter earnings is pinned at $3.27, suggesting a 26.7% rise from $2.58 reported in the year-ago quarter. Earnings estimates have moved up by a penny in the past 30 days.
The company delivered an earnings surprise of 16.6% in the last reported quarter. LULU's bottom line beat estimates by 21%, on average, in the trailing four quarters.
Key Factors to Note
lululemon has been benefiting from a positive response for its products, particularly the athletic and leisurewear brands, along with improved store productivity. Strength across all categories, channels and geographies has been aiding its performance.
A rebound in brick-and-mortar sales, driven by increased store traffic as consumers return to stores, bodes well. Continued investments to enhance the in-store experience are likely to have bolstered sales and earnings in the fiscal fourth quarter.
Alongside these, lululemon has been leveraging its stores to facilitate omni-channel capabilities, including the buy online pick up in store and ship from store. It has implemented several strategies to improve the guest experience and reduce wait time, including virtual waitlist, mobile POS and appointment shopping. The features have enabled reducing the time of waiting in line to enter stores and allowing customers to complete some transactions like returns, exchanges and purchase of gift cards without entering stores. These are expected to have aided the company's top and bottom lines in the to-be-reported quarter.
However, lululemon continues to reel under industry-wide supply-chain challenges, driven by port congestions and reduced airfreight capacity, which are likely to have impacted its business in fiscal 2021. The ongoing issues at the ports and reduced airfreight capacity have not only led to delays but also resulted in increased freight costs.
On its last reported quarter’s earnings call, management expected fiscal 2021 gross margin to be affected by 150-200 bps of higher airfreight expenses. It also envisioned a negative impact of 450 basis points from airfreight costs due to congestion and capacity constraints in the fiscal fourth quarter.
Also, the rising trend in SG&A expenses is expected to have been concerning. SG&A expenses for the fiscal fourth quarter are envisioned to deleverage 200-250 bps on a two-year basis. The deleverage mainly relates to higher depreciation due to accelerated investments to support the e-commerce business in 2021, the consolidation of MIRROR’s results this year, and increased investments in brand-building for its growth initiative.
The company, in its earlier earnings report, predicted fourth-quarter fiscal 2021 revenues at the lower end of the previously stated range of $2.125-$2.165 billion. Adjusted earnings per share were anticipated at the low-end of the $3.25-$3.32 range mentioned previously.
Our proven model does not conclusively predict an earnings beat for lululemon this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
lululemon has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks With Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
News Corporation (NWSA - Free Report) has an Earnings ESP of +22.58% and it currently sports a Zacks Rank of 1. The company is likely to register an increase in the top line when it reports third-quarter fiscal 2022. The Zacks Consensus Estimate for quarterly sales moved up 14.3% to 16 cents per share, suggesting 77.8% growth from the year-ago quarter’s reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.
News Corp’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.5 billion, which suggests a rise of 6.7% from that reported in the prior-year quarter. NWSA has delivered an earnings beat of 274.3%, on average, in the trailing four quarters.
Whirlpool Corporation (WHR - Free Report) currently has an Earnings ESP of +7.36% and a Zacks Rank of 2. However, the company is likely to register a decrease in the bottom line when it reports first-quarter 2022 results. Although the Zacks Consensus Estimate for quarterly earnings moved up 0.4% to $5.30 per share in the past 30 days, it suggests a decline of 26.4% from the year-ago quarter’s reported number.
Whirlpool’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.5 billion, which suggests a rise of 1.7% from the figure reported in the prior-year quarter. WHR has delivered an earnings beat of 14.9%, on average, in the trailing four quarters.
Charter Communications (CHTR - Free Report) currently has an Earnings ESP of +1.66% and a Zacks Rank #3. CHTR is anticipated to register top-line growth when it reports first-quarter 2022 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $13.2 billion, indicating an improvement of 5.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Charter Communications’ bottom line has moved down 1.1% in the past 30 days to $6.57 per share. However, the metric reflects growth of 59.9% from $4.11 reported in the year-ago quarter. CHTR has delivered an earnings beat of 12%, on average, in the trailing four quarters.
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Factors to Decide lululemon's (LULU) Fate in Q4 Earnings
lululemon athletica inc. (LULU - Free Report) is likely to witness top and bottom-line growth when it reports fourth-quarter fiscal 2021 results on Mar 29, after market close.
The Zacks Consensus Estimate for fiscal fourth-quarter sales is pegged at $2.13 billion, indicating a 23.4% increase from the prior-year quarter's reported figure. The Zacks Consensus Estimate for the company's fiscal fourth-quarter earnings is pinned at $3.27, suggesting a 26.7% rise from $2.58 reported in the year-ago quarter. Earnings estimates have moved up by a penny in the past 30 days.
The company delivered an earnings surprise of 16.6% in the last reported quarter. LULU's bottom line beat estimates by 21%, on average, in the trailing four quarters.
Key Factors to Note
lululemon has been benefiting from a positive response for its products, particularly the athletic and leisurewear brands, along with improved store productivity. Strength across all categories, channels and geographies has been aiding its performance.
A rebound in brick-and-mortar sales, driven by increased store traffic as consumers return to stores, bodes well. Continued investments to enhance the in-store experience are likely to have bolstered sales and earnings in the fiscal fourth quarter.
Alongside these, lululemon has been leveraging its stores to facilitate omni-channel capabilities, including the buy online pick up in store and ship from store. It has implemented several strategies to improve the guest experience and reduce wait time, including virtual waitlist, mobile POS and appointment shopping. The features have enabled reducing the time of waiting in line to enter stores and allowing customers to complete some transactions like returns, exchanges and purchase of gift cards without entering stores. These are expected to have aided the company's top and bottom lines in the to-be-reported quarter.
However, lululemon continues to reel under industry-wide supply-chain challenges, driven by port congestions and reduced airfreight capacity, which are likely to have impacted its business in fiscal 2021. The ongoing issues at the ports and reduced airfreight capacity have not only led to delays but also resulted in increased freight costs.
On its last reported quarter’s earnings call, management expected fiscal 2021 gross margin to be affected by 150-200 bps of higher airfreight expenses. It also envisioned a negative impact of 450 basis points from airfreight costs due to congestion and capacity constraints in the fiscal fourth quarter.
Also, the rising trend in SG&A expenses is expected to have been concerning. SG&A expenses for the fiscal fourth quarter are envisioned to deleverage 200-250 bps on a two-year basis. The deleverage mainly relates to higher depreciation due to accelerated investments to support the e-commerce business in 2021, the consolidation of MIRROR’s results this year, and increased investments in brand-building for its growth initiative.
The company, in its earlier earnings report, predicted fourth-quarter fiscal 2021 revenues at the lower end of the previously stated range of $2.125-$2.165 billion. Adjusted earnings per share were anticipated at the low-end of the $3.25-$3.32 range mentioned previously.
lululemon athletica inc. Price and EPS Surprise
lululemon athletica inc. price-eps-surprise | lululemon athletica inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for lululemon this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
lululemon has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks With Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
News Corporation (NWSA - Free Report) has an Earnings ESP of +22.58% and it currently sports a Zacks Rank of 1. The company is likely to register an increase in the top line when it reports third-quarter fiscal 2022. The Zacks Consensus Estimate for quarterly sales moved up 14.3% to 16 cents per share, suggesting 77.8% growth from the year-ago quarter’s reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.
News Corp’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.5 billion, which suggests a rise of 6.7% from that reported in the prior-year quarter. NWSA has delivered an earnings beat of 274.3%, on average, in the trailing four quarters.
Whirlpool Corporation (WHR - Free Report) currently has an Earnings ESP of +7.36% and a Zacks Rank of 2. However, the company is likely to register a decrease in the bottom line when it reports first-quarter 2022 results. Although the Zacks Consensus Estimate for quarterly earnings moved up 0.4% to $5.30 per share in the past 30 days, it suggests a decline of 26.4% from the year-ago quarter’s reported number.
Whirlpool’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.5 billion, which suggests a rise of 1.7% from the figure reported in the prior-year quarter. WHR has delivered an earnings beat of 14.9%, on average, in the trailing four quarters.
Charter Communications (CHTR - Free Report) currently has an Earnings ESP of +1.66% and a Zacks Rank #3. CHTR is anticipated to register top-line growth when it reports first-quarter 2022 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $13.2 billion, indicating an improvement of 5.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Charter Communications’ bottom line has moved down 1.1% in the past 30 days to $6.57 per share. However, the metric reflects growth of 59.9% from $4.11 reported in the year-ago quarter. CHTR has delivered an earnings beat of 12%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.