LULU
📉 Lululemon issued weaker-than-expected guidance for Q1 2025, projecting only 5-7% growth, a significant slowdown from the accustomed rate of over 10%, disappointing analysts.
😟 CEO Calvin McDonald highlighted survey findings indicating consumers are spending less due to economic and inflation concerns, leading to reduced foot traffic in U.S. stores, mirroring trends seen at other retailers like Nike.
📦 The company reported a 9% increase in inventories, adding another layer of concern for investors despite beating Q4 earnings and revenue expectations.
@bernardodegarcia:
“The shares of Lululemon were analyzed yesterday after their quarterly results. After their earnings surpassed expectations in terms of fourth-quarter earnings and revenue, they issued guidance for 2025 that disappointed analysts. In their earnings call, CEO Calvin McDonald stated that the sportswear company conducted a survey earlier this month which found that consumers are spending less due to economic and inflation concerns, resulting in lower customer traffic in the United States. Obviously, this is not only affecting Lululemon; American Eagle Outfitters already told us this in their quarterly results, Deckers Outdoor also mentioned it, and more recently, Nike told us much the same thing. However, it’s also true that Lululemon’s CEO said customers responded well to the company’s innovation. He literally said, ‘There remains considerable uncertainty driven by macroeconomic and geopolitical circumstances, but that said, we remain focused on what we can control,’ McDonald stated, referring to product innovation and obviously offering better products at better prices. Inventories also rose by 9%, which is somewhat concerning. The company’s shares, as we see, are falling 12% in pre-opening trading, now trading at an interesting multiple; it might be trading at a forward P/E of 21. Lululemon was just the latest retailer to announce it expects a decrease in sales for the rest of this year as concerns about the slowing economy and President Donald Trump’s tariffs increase.”
Watch the exact part of the video where @bernardodegarcia talks about Lululemon Athletica Inc. here:
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