Lululemon (LULU) expects net revenue to hit $6.2B in 2021. Buy alert?

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Lululemon (LULU) expects net revenue to hit $6.2B in 2021. Buy alert?

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 Lululemon (LULU) expects net revenue to hit $6.2B in 2021. Buy alert?
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Highlights 

  • Lululemon Athletica Inc (NASDAQ:LULU, LULU:US) said on Wednesday, September 8, that it expects to rake in a net revenue of up to US$ 1.43 billion in the third quarter of fiscal 2021.
  • Following this announcement, Lululemon’s stocks rose in late trading on Wednesday, hitting a day-high of US$ 386.27.
  • Lululemon’s net revenue shot up by 61 per cent year-over-year (YoY) to US$ 1.5 billion in the second quarter of fiscal 2021.

Lululemon Athletica Inc (NASDAQ:LULU, LULU:US) appears to be attracting investor attention in the wake of its latest earnings report.

The Canadian athletic wear maker said on Wednesday, September 8, that it expects to rake in a net revenue in the range of US$ 1.4 billion to US$ 1.43 billion in the third quarter of fiscal 2021.

Lululemon also expects its diluted earnings per share (EPS) to be around US$ 1.28 to US$ 1.33 in the same quarter.

For the fiscal year of 2021, Lululemon projected a net revenue of about US$ 6.19 billion to US$ 6.26 billion.

Following this announcement, Lululemon’s stocks rose in late trading on Wednesday, hitting a day-high of US$ 386.27. At close, however, the stock was down 1.4 per cent at US$ 380.5.

Let’s take a closer look at Lululemon’s latest financials.

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Lululemon Athletica Inc (NASDAQ:LULU, LULU:US) Q2 FY21 results

Lululemon’s net revenue shot up by 61 per cent year-over-year (YoY) to US$ 1.5 billion in the second quarter of fiscal 2021. While its company-operated stores noted a net revenue rise of 142 per cent YoY to US$ 695.1 million in the latest quarter, its direct-to-consumer net revenue grew by eight per cent to US$ 597.4 million.

The Vancouver-based company recorded a 72 per cent YoY increase in its gross profit of US$ 842.7 million in Q2 FY21, while its gross margin climbed by 390 basis points to 58.1 per cent.

Lululemon’s income from operations amounted to US$ 291 million in the latest quarter, up by 134 per cent.

Stocks of Lululemon Athletica surged by about 23 per cent in the last six months. Its year-to-date (YTD) stock price growth stands at over nine per cent, while that of the last one year is about 8.8 per cent.

Also read: 5 Canadian growth stocks to buy & hold forever

Bottom line

While CEO Calvin McDonald said that Lululemon’s second quarter results reflected a “continued momentum across the business”, the company’s Chief Financial Officer Meghan Frank noted that supply chain headwinds remain.

However, even as the company navigates through the COVID-19 pandemic, it has notably raised its sales guidance to US$ 6.26 billion for the full fiscal year.

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