lululemon (LULU 143.81, +11.65, +8.81%) is trading higher after the company
raised fourth quarter guidance ahead of the ICR Conference in Orlando this
The athletic apparel company increased its fourth quarter earnings, revenue and same store sales outlook. The guidance raise was generally expected by investors and analysts.
lululemon raised fourth quarter EPS to $1.72-1.74 from $1.64-1.67, revenue to $1.14-1.15 bln from $1.115-1.125 bln and same-store sales to mid-to-high teens growth on a constant dollar basis from high-single to low-double digit growth.
The company's business remains on fire. This represents the fifth consecutive quarter of double-digit comp sales growth and the tenth consecutive quarter beating comp sales estimates.
The updated outlook would put its earnings growth for the year at 45%, with comp sales in the +17% range. Looking out to the current fiscal year, earnings growth is currently expected to slow to ~16% with comp sales up nearly 8%.
LULU hit a new all-time high of nearly $165/share in early October before succumbing to broader market weakness and falling to a low of almost $110/share on Christmas Eve.
At ~32x EPS estimates for this year, the stock trades at a notable premium to most retailers. Only hot discount retailers Ollie's Bargain Outlet (OLLI) and Five Below (FIVE) have higher earnings multiples.
While lululemon faces difficult comps this year, the company has previously shown an ability to sustain growth in its high-end niche market.
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