Why Lululemon Burst Again?

——Like the old saying, Less is more!

The financial reports of US sports brands are often not based on natural quarters and years, such as $Lululemon Athletica(LULU)$ ,That is, the end of January of the following year is the end of the current fiscal year. Therefore, in the past quarter at the end of July, Lulu Lemon experienced the second quarter of fiscal year 2021.

The market's expectations for the performance of sports brands are not full. The main reason is that repeated epidemics in North America constantly bring challenges to outdoor activities. Therefore, LULU's share price did not show a new high with the market before the financial report, but was somewhat conservative.

However, as soon as the after-hours financial report was announced on September 8th, the market admitted its mistake and immediately rose by over 12%.

Although LULU's Q2 financial report performed well and unexpectedly, it was not exaggerated to subvert cognition.

First of all, the overallRevenue was US $1.451 billion, a year-on-year increase of 61%, higher than Wall Street's forecast of $1.33 billion. Considering last year's low base, this growth is also a reasonable range. What is more important is that the sales of stores as the basic disk recovered rapidly. This business is widely believed to have been hit during the epidemic, but as a result, the CAGR of revenue in two years also reached 9%.

It can also be seen intuitively from the following figure,The recovery of chain stores' performance is obvious.

At the same time, from the perspective of regional income, the income growth in North America is the fastest, which also confirms the rise of offline consumption.

From the perspective of income category, it is male sports products that grow faster. In fact, this trend did not come into being this quarter. In 2021, the rebound growth rate of men's products is obviously greater than that of women's products. On the one hand, the popularity of these light sports, like Yoga, among Male, has exceeded expectations. On the other hand, under the epidemic situation, many men also chose non-confrontational sports such as indoors and jogging,which happens to be LULU's expertise.

Of course, with the growth of income, the profit rate has been further improved. Net profit reached US $208 million, compared with US $86.8 million in the same period last year, up 140% year-on-year. Diluted GAAP earnings per share was US $1.59, exceeding Wall Street's expectation of US $1.19 and much higher than US $0.66 in the same period last year.

In terms of products, LULU takes a relatively fashionable and technological route, and its products are positioned at the middle and high end, so the average unit price will be higher. Its most popular products are sportswear without interference and weightlessness, and even make it to the women's bra market.

Strategically, LULU also began to move closer to a deeper fitness brand. In July, LULU also acquired Mirror, a two-year-old yoga company.

However, I think the important reason for LULU's stock price rising after hours is its next quarter and annual guidance.

For Q3 in 2021, the company's expected revenue is 1.4-1.43 billion US dollars, higher than the previous forecast of 1.3 billion US dollars, and EPS is 1.33-1.38 US dollars, higher than the expected 1.32 US dollars;
For the whole year of 2021, the company's expected revenue is 6.19-6.26 billion US dollars, higher than the expected 5.98 billion US dollars, and EPS is 738-748 million US dollars, higher than the previous forecast of 6.9 US dollars.

Looking at the whole Q2 earnings season of US stocks, a large number of companies adjusted their guidance because of the pandemic, but they all adjusted downward, while few raised their guidance upward.

Less is more, and LULU has naturally become a company that can rise against the trend in this earnings season.

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  • BullishKing
    ·2021-09-09
    TOP
    I love LULU. Like Like Like.
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    • Chiweii
      ?
      2021-09-13
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    • KLHuat
      So hard to mark the entry
      2021-09-11
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    • megadisc
      We
      2021-09-11
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  • MengYang
    ·2021-09-10
    TOP
    nice, please like
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    View more 2 comments
  • Short
    ·2021-09-09
    TOP
    comfortable clothing for work at home?
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    • Chiweii
      Agreed
      2021-09-16
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    • 1moretime
      Agre… sports wear doubling up as lounge wear
      2021-09-12
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  • AnneSeow
    ·2021-09-12
    TOP
    They are a good company and these are the kind of company to buy the dips on. Be patient and get rewarded.
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    • NP_YT
      strong!
      2021-09-13
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    • WinterinessReplying toookezy
      k
      2021-09-13
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    • ookezy
      Like
      2021-09-12
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  • fishfire
    ·2021-09-09
    TOP
    rapid change of product mix to indoor sport wear.. lulu has strong marketing team
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    • sk5735
      Yup! Totally agree!
      2021-09-13
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    • Chiweii
      Yeah
      2021-09-11
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  • KYHBKO
    ·2021-09-10
    TOP
    the improved guidance and earnings for next quarter has inspired the jump
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  • 钞能力系我
    ·2021-09-12
    9.9巨量出货大阴线,还有一段时间补缺口,短期还是看空
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  • Ironman2002
    ·2021-09-10
    Lulu understands the needs of consumers’ behaviour. Today’s sports attire has to be funtional, comfortable and fashionable!
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  • Kaka1992
    ·2021-09-12
    Okay, Like my commentvthanks
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  • SamYYL
    ·2021-09-10
    Good and like
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  • Hazellsm
    ·2021-09-10
    Fav sports brand
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  • 沙發馬鈴薯
    ·2021-09-10
    [美金] [美金] [美金]
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  • Monir khan
    ·2023-12-22
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  • jacky998
    ·2021-09-12
    很有意思的公司。
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  • Likelike
    ·2021-09-12
    Sour note: till LaiLaiLemon comes in.....
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  • Weiheng84
    ·2021-09-12
    Pls like thank everyone
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  • Vgreen
    ·2021-09-12
    [强] [强] [强]
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  • hellodarz888
    ·2021-09-12
    sold it too early when it hit 300 few mths back
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  • Donokane
    ·2021-09-10
    Nice one, Captain Jack!
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  • Ironman2002
    ·2021-09-10
    Less is more is the way to go!
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