Lululemon Athletica, Inc. (NASDAQ: LULU)
Lululemon Athletica Inc. (LULU), an athletic apparel and accessories company yesterday announced their third quarter fiscal 2015 financial results. LULU reported revenues of $479.7 million which was up 14% from third quarter 2014. However the revenue number fell short of analysts expectations of $482.13. LULU posted earnings per share of $0.38 which was down from third quarter 2014 of $0.42. Furthermore, LULU lowered the upper end of its full year 2015 revenue forecast. The original range range was $2.03 billion to $2.06 billion, that was cut to $2.03 billion to $2.04 billion. Additionally fourth quarter guidance numbers fell short of analyst expectations. LULU posted guidance for fourth quarter earning per share number of $0.75-0.78, falling short of analyst expectations of $0.85. Guidance for fourth quarter revenue numbers was $670 million to $685 million, short of analyst expectations of $690.20 million.
Lululemon Athletica, Inc. CEO Comments
Laurent Potdevin, lululemon’s CEO, stated:
“We had a solid quarter in line with our expectations underscored by the combination of our product, guest and community initiatives along with tremendous guest reception to major store openings around the world. I would like to personally thank all of our educators who create amazing experiences for our guests every day.”
Mr. Potdevin continued,
“We’ve implemented critical organizational changes this quarter and now have in place a complete, world-class management team that is aligned with our strategic global priorities focused on design and dedicated to creating long-term value.” Business Wire
LULU Technical Analysis
LULU gapped down in price yesterday to $46.84, up from the prior day’s close of $52.16, which is a 10% decrease on mixed news. Taking a look at the daily chart, we can see the last time LULU traded below this price level was on November 18th, when it traded at $45.69. Taking a further look back on the daily chart, we can see that LULU has been on an overall decline dating back to September 8th when it traded at $65.89. On that occasion, two days later on September 10th LULU traded at $53.54, a 19% drop in price based on disappointing Q2 earnings. LULU does have a float of 110.37 million shares and was trading over 2 times the normal daily trading volume. LULU did reach pre market lows of $45.56, but rebounded $1.28 at the open, or equivalent to 3%. For trading purposes, my entry short would have been $46.75 looking for a move to $46. My stop loss would have been $47, fearing any move above that and the stock would start to fill in the gap down.
lululemon athletica inc., together with its subsidiaries, designs, manufactures, and distributes athletic apparel and accessories for women, men, and female youth. It operates through two segments, Corporate-Owned Stores and Direct To Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle activities and athletic pursuits, such as yoga, running, and general fitness; and dance-inspired apparel for female youth. It also provides fitness-related accessories, including bags, socks, underwear, yoga mats, and water bottles. The company sells its products through a chain of corporate-owned and operated retail stores; a network of wholesale channel, such as yoga studios, health clubs, and fitness centers; and outlets and warehouse sales, as well as directly to consumer through lululemon.com and ivivva.com e-commerce sites, and showrooms. As of February 1, 2015, it operated 302 corporate-owned stores under the lululemon athletica and ivivva athletica brand names in the United States, Canada, Australia, New Zealand, the United Kingdom, and Singapore. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada. Yahoo Finance