Lululemon Athletica (NASDAQ:LULU)’s Next Year Guidance

Lululemon Athletica Inc. (NASDAQ:LULU) is a firm that makes yoga inspired athletic apparel. This clothing line is run at many international clothing stores. In the recent past, the company’s revenues have been fluctuating. The third quarter’s earnings for 2014 seem diluted, with the earnings per share being $0.42 on revenues of $419.4 million. This was a rise over last year’s performance of $0.38 EPS on revenues of $424.77 million.

Even though the same store sales dropped by 3% over the year for this quarter, the comparable sales along with online sales rose by 3%. Direct sales however, make up to 27% of the company’s total sales.

In terms of setting guidance for the fourth quarter, the company expects its EPS to be $0.65 to $0.69 and the expected revenue to range between $570 million to $585 million. The estimated consensus for the EPS lies at $0.72 and the revenue is expected to be $593.54 million. But as we enter into the fourth quarter, Lululemon (NASDAQ:LULU) lowered its guidance for revenue as delays take place at the West Coast ports, where store openings are postponed and the Canadian dollar seems to be getting weaker.

For a full year review, the company guidance adjusted the EPS between $1.74 to $1.78 and revenue to range between $1.765 billion to $1.780 billion. But the estimated consensus is set at $1.77 EPS, along with $1.79 billion in terms of revenue. The guidance however doesn’t include the $30.9 million in connection to foreign earnings to fund a $450 million worth of share purchase program.

The firm repurchased a total of 1.8 million shares of the common stock at the cost of $40.49 per share in the third quarter. In its first three quarters, the shares repurchased was worth $3.3 million at $39.94 per share. The shares seem to have been appreciated by 4.3%.  In the past year, the shares have fallen by 32% and in the last 2 years, by 37%. In the summer of 2013, the EPS attained new heights with the stock price being worth $82.

According to a public statement made by the CEO, the management is quite satisfied with the performance in the third quarter results, with the company attaining new margins in terms of brand, guest experience and product. He has firm believe in his team and along with a well-focused strategy, a positive impact has been made in all core business spheres. There is also a lot of potential in terms of global growth.

The pre-trading Thursday, Lululemon (NASDAQ:LULU) shares were down by 2% with $45.75 in a 52 week range of $36.26 to $71.88.

Looking into the firm’s past, it’s pretty obvious that the firm has been a target to several controversies from legal disputes to offences as serious as murder accusations, yet Lululemon (NASDAQ:LULU) has managed to pull through and make the most out of the existing situation. It evidently remains to be seen whether or not the year ahead will fall within Lululemon Athletica (NASDAQ:LULU) expectation radar.


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