Athletic apparel and footwear company Lululemon (NASDAQ:LULU) The stock is down (-28%) in the bear market of 2022 despite great earnings performance. Famous retail Health apparel brand still firing on all cylinders Consumers return to work despite the return of formal wear. The company raised its full-year 2022 top and bottom guidance recently, showing 32% growth in the fiscal first quarter’s top line. This direct-to-consumer (DTC) net revenue also climbed 32% and made up 45% of total net revenue. e-commerce Sales showed a strong growth rate of 40%. These impressive results happened despite the supply chain obstacle, inflationary pressureAnd this China The COVID lockdown, which has caused about a third of its 71 stores to be temporarily closed for some time. The company plans to open most of its 40 new stores in the mainland. China Thanks to its 60% three-year CAGR. The company is experiencing growth Logistics It has also strengthened its inventory to reduce costs and longer freight charges but some transient challenges. Prudent investors seeking investment retail seller One that’s still dealing with strong top and bottom line growth could look for an opportunistic pullback in Lululemon shares.
Fiscal Q1 2022 Earnings Release
On June 2, 2022, Lululemon released its fiscal first quarter 2022 results for the quarter ended April 2022. The company reported earnings-per-share (EPS) profit of $1.48, beating consensus analyst estimates for $1.43 to $0.05. Revenue grew 31.6% year-over-year (YOY) to $1.61 billion, beating analyst estimates of $1.55 billion. Total comparable sales increased 28% and DTC’s revenue increased 32%.
Lululemon CEO Calvin McDonald commented, “In the first quarter of 2022, continued momentum in the business enabled us to get off to a strong start to the year. These results provide a solid foundation as we begin our next five-year journey.” do and deliver against your new. The power of a three×2 growth plan. To stay agile to achieve your goals, and continue to execute at a high level, while successfully navigating challenges within a macro environment I want to thank our teams throughout. We all look forward to Lululemon as we continue to grow the brand.”
Lululemon raised its guidance on revenue for fiscal Q2 2022 EPS of $1.82 to $1.87 versus consensus analyst estimates of $1.750 billion to $1.775 billion. Full-year fiscal 2022 EPS is expected to be in the range of $9.35 to $9.50 versus the $9.35 consensus analyst estimate of $7.61 billion to $7.71 billion versus the $7.58 billion consensus analyst estimate.
Conference Call Takeaways
CEO McDonald provided the narrative of the overall macro environment and how Lululemon differentiates itself in the highly competitive fitness wear category. Simplified quickly, the high quality of its original and new merchandise has driven demand and strong traffic both in store and online. It achieved 40% year-on-year growth in its e-commerce channel. To ease supply chain pressures, the company has strengthened its inventory position with higher than normal levels to balance momentum. The lockdown in China is showing only a modest impact as a third of its 71 stores in China were temporarily closed at some point, but they are beginning to reopen. Revenue continues to grow at over 60% on a three-year CAGR basis. The company plans to open 40 of its new stores in mainland China in 2022. The company will continue to invest in this area and remain excited about its business in China. As for the global supply chain, CEO McDonald commented, “Given the global supply chain, overall, the environment remains challenging. Ocean lead times are not improving, and air freight costs remain high. To address these issues, our team is carefully balancing the pace of our business with timeline uncertainties to help meet guest demand. This comes with a similar investment in air freight, which important because we make satisfying guest demand a priority.”
LULU Opportunistic Pullback Level
using the rifle chart Provides an accurate view of the outlook for LULU stock on the weekly and daily time frames. Weekly Rifle Chart $314.96 . was rejected on an attempt to bounce near Fibonacci (Fib) Levels The stock fell as it broke through the weekly 200-period moving average (MA) to $272.63, before turning back above it in an attempt to stabilize the price. The weekly 5-period MA is still declining at $287.64, followed by the 15-period MA at $322.68 as the Weekly Stochastic attempts a mini reversal puppy at the 20-band. The weekly lower Bollinger Bands (BBs) is near $240.95. weekly Market Structure Less (MSL) Buy trigger on breakout through $305.81. The Daily Rifle chart is in a downtrend with the 5-period MA at $278.85, followed by the 15-period MA at $292.23 with the Stochastic Minute Reversal Puppy falling below the 40-bands. Daily low BB sits at $249.05. Prudent investors can watch for opportunistic pullback levels at $263.77 Fib, $253.07, $246.76 Fib, $240.95 Fib, $234.75 Fib, $225.60 Fib, $212.24 Fib and $207.73 Fib levels. The upward trajectory is from the $314.96 Fib level to the $360.83 Fib level.