On Wednesday, shares of up-and-coming Canadian athletic brand Lululemon Athletica rose up by more than 12% after the company reported their fiscal third-quarter earnings which exceeded initial earnings forecasts and outlook.

From Wall Street consensus estimate of a $0.43 earnings per share, the Canada-based company reported a $0.50 earnings per share $0.07 higher than the Wall-Street forecast while analysts forecasted a $540 million revenue compared to their actual revenue of $544 million posting a rise of around 13%. Zacks Investment Research and Thomson Reuters also forecasted then a 43 cents earnings per share.

For the Quarter, the company is reporting a rise of 28% in their profits with their earnings amounting to up to $68.3 million in the period that ended last October 30 compared to their same quarter earnings last year of $53.2 million or $0.38 earnings per share. Lululemon same-store sales also rose by around 7% beating analysts expectations of a 5.4% same-store sales increase.

The yoga and lifestyle apparel retailer also beat a revenue forecast from Zacks Investment Research of $542.7 million although for the next quarter earnings report, the investment research firm adjusted their earnings expectations to $792 million compared to Lululemon’s own expectations of $765 to $785 million in revenue missing Zacks own forecast and Wall Street’s . Lululemon also forecasted earnings per share of around $0.96 to $1.01.

Lululemon has been under the close watch of investors since the company showed fair second quarter earnings results back in September reaching their expecting earnings despite failing to reach their forecasted revenue by a marginally small percentage.

For the company’s full-year earnings forecast, Lululemon expects an earnings per share of about $2.11 to around $2.16 with their revenue to range around $2.32 billion to $2.34 billion.

LULU Gets Strong Buy Rating

Following a positive earnings beat, Lululemon is now getting a series of ‘sell’ and ‘strong sell’ ratings from firms and research groups such as Goldman Sachs, and Vetr. Although this suggests a possible decline, some brokerages have also given the company buy and outperform ratings such as Wedbush and twenty-one others.

LULU Shares


Despite the ever-increasing amount of competition for the athletic wear brand, Lululemon Athletica’s recent quarter earnings report is now showing a potential upward trend as the company shares have soared by more than 12% on heavy trading volume on their recent earnings report that beat analyst estimates and with the stock rising 14% this year.

Along Lululemon’s top products include leggings which are still under a strong demand according to a study held by investment and banking firm Piper Jaffray which showed that leggings remain under one of the top trends among teens lately.

Investors are also set to benefit from a recent stock-buyback plan that company has approved for $100 million worth of shares although this might set the stock to be pricier in time. The company’s progress also remains in line with their five-year goal including marking their $4 billion revenue. The company’s positive performance during this year’s Black Friday is also believed by some investors to continue with the upcoming Holiday shopping season. Should investors worry about their competitors, this hasn’t been poised as an issue lately since the early holiday season has started. Lululemon currently has a market capitalization of $7.83 billion.

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