Athletic retailer Lululemon Athletica inc. (NASDAQ:LULU) is slated to announce its first quarter fiscal 2015 earnings results on Tuesday, June 9 before the market opens. Wall Street expects the company to post earnings of $0.33 a share and $418.95 million in revenue, down from $0.34 earnings per share but up from $384.62 million in revenue from the same quarter last year.
New management has been diligently working to make positive changes on Lululemon’s image, reputation, and performance. However, some investors are still unhappy with the way management is running the company due to a lack of transparency and think it needs improvement. Additionally, Wall Street is predicting a sales miss in Lululemon’s Q1 report due to western port delay issues. Due to these concerns, Lululemon stock has fallen approximately 12% from its April high.
A handful of analysts have weighed in on Lululemon ahead of its Q1 report.
Oppenheimer analyst Anna Andreeva maintained an Outperform rating on Lululemon with a $70 price target on June 2, citing that “The company historically earns more in 2Q than in 1Q.” The analyst noted, “We like LULU’s risk/return given rare sq footage/top-line growth story in strong athletic category with earnings growth accelerating starting ’16.”
According to TipRanks, Anna Andreeva has rated Lululemon 18 times since June 2014, earning a 73% success rate recommending the retailer and a +22.8% average return per LULU recommendation. Overall, Andreeva has a 60% success rate recommending stocks and a +9.3% average return per recommendation.
On June 1, however, Stifel Nicholas analyst Jim Duffy commented on Lululemon, warning short-sellers that they could be headed for an ambush when the company posts its Q1 results on June 9. The analyst noted, “With international visibility limited and little room for execution error into 2016, we remain on the sidelines without more conviction behind merchandising execution to drive outsized comp and margin improvement.”
Duffy currently has a Hold rating on Lululemon.
According to TipRanks, Jim Duffy has rated Lululemon 9 times since January 2013 with no success and a -32.9% average loss. Overall, he has a 60% success rate recommending stocks and a +9.0% average return per recommendation.