LULU is Leading Again

March 21, 2024

LikeFolio's earning signal is bullish ahead of Lululemon's (LULU) Q4 earnings.

This signal is driven by growth in eCommerce (web visits are up by +25% YoY) and high levels of consumer happiness (sentiment is at 72% positive).

Not only do these metrics reveal growth, but even compared to large peers like upper-echelon retailer Vuori and well-established Nike, Lululemon overperforms.

We know the company had a tremendous start to its holiday season. The brand experienced its "single biggest day" in company history on Black Friday, but issued tepid guidance for the remaining 4th quarter. This may prove to be overly cautious, at least based on our data points.

And it looks like Lululemon is eliminating some of the noise dragging it down in prior quarters and focusing on what it does best: high quality, comfortable clothes (and accessories) in store and increasingly online.

  • LULU is finally giving up on its failed Mirror acquisition. The company is winding down operations for Mirror, a connected fitness company it acquired during the Covid-19 pandemic, after incurring significant impairment charges. Moving forward, Lululemon has formed a new partnership with Peloton, where Lululemon will become Peloton's primary athletic apparel partner, and Peloton will provide content for Lululemon's app.
  • Heading into earnings, we expect eCommerce to continue to shine. Last quarter, direct-to-consumer sales increased 18%, besting the 16.9% analysts expected.
  • Qualitative mentions and keyword searches show strength in its viral items, including its belt bag and its expanding casual-but-comfy-professional line.

Our only note of caution: despite a solid holiday season, mentions are showing signs of a near term cool-down, flipping negative (-8% YoY) on a 30day Moving Average.

If the company issues overly cautious guidance to this tune, it could thwart any momentum from a strong holiday season.

LULU shares have closed higher at week's end following its last 4 reports.

Want deeper insights? Get Free Access to The Vault.

Related Posts

Is Tiffany's losing its bling...again?

Tiffany's (TIF) will report quarterly earnings Wednesday prior to the […]

Read More
Trouble for Lululemon?

Lululemon (LULU) We won't lie, we were shocked to see […]

Read More
Lululemon: still the hottest gift under the tree?

Lululemon (LULU) Lululemon is a Wall Street darling. Shares have […]

Read More
1 2 3 7

Related Posts

Related Reports

About LikeFolio

LikeFolio analyzes social media data to accurately predict shifts in consumer behavior. We sell data and insights to professional investors, corporate research teams, and software providers.
© 2024
 LikeFolio. All Rights Reserved.