Lululemon Price Target Boosted to $360 at Bernstein

Lululemon Athletica Inc. (LULU) shares surged on Friday as analysts rushed to raise their price targets following the company's better-than-expected third-quarter earnings and increased guidance. Bernstein analyst Aneesha Sherman led the pack, raising the firm's price target on Lululemon to $360 from $325 and maintaining a Market Perform rating on the shares.

Lululemon's Q3 print was a small beat with a big stock reaction, driven by a combination of a squeeze and growing optimism on FY25 and beyond, Sherman tells investors in a research note. The firm sees an inflection on the Americas business in Q1, while China continues full speed ahead.



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Lululemon Athletica designs, distributes, and markets athletic apparel, footwear, and accessories for women, men, and girls. Lululemon offers pants, shorts, tops, and jackets for both leisure and athletic activities such as yoga and running. The company also sells fitness accessories, such as bags, yoga mats, and equipment. Lululemon sells its products through more than 700 company-owned stores in about 20 countries, e-commerce, outlets, and wholesale accounts. The company was founded in 1998 and is based in Vancouver, Canada.

What's Going On With LULU Shares?
In This Article:

The Q3 cycle is over, with the bulk of companies already revealing their quarterly results. The period was again another of positivity, with earnings growth remaining positive and seeing a nice boost from technology.

But one late reporter, lululemon LULU, posted results that positively shocked investors. Let’s take a closer look at the results.

Lulu Enjoys Profitability Boost

Concerningheadline figures in its release, LULU posted a 7% beat relative to the Zacks Consensus EPS estimate and reported sales 2% ahead of expectations, with both items higher than the year-ago period.

Still, the biggest highlight of the release was margin expansion, with the company’s gross margin improving 150 basis points to 20.5%. Gross profit totaled $1.4 billion, climbing a solid 12% year-over-year.

In addition, comparable store sales increased 4% year-over-year, reflecting that their existing location are still experiencing modest growth. And lululemon added 28 new stores throughout the period, expanding its footprint nicely.

The results perked up shares in a big way, a welcomed development among investors following a rough start to 2024. Up 60% in three months, the stock has bounced back in a big way following a tough start, widely outperforming over the time period. Below is a chart illustrating the year-to-date performance of shares.

Image Source: Zacks Investment Research

Lululemon wrapped up the strong print by announcing a $1 billion increase to its existing buyback program, which can help put in a floor for shares.

Bottom Line

Lululemon LULU helped send the Q3 earnings cycle off in positivity, with the company’s results pleasing investors and causing shares to melt higher following the print.

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