Shares of Lululemon Athletica Inc. (NASDAQ: LULU) jumped 10% on Thursday on the back of a strong earnings report delivered by the company a day ago. The retailer beat revenue and earnings estimates for Q2 2021 and raised its guidance for the full year. The stock has gained 22% since the beginning of the year.
Strong Q2 numbers
Lululemon’s net revenue grew 61% year-over-year to $1.5 billion, surpassing market estimates. Revenue grew 64% compared to the second quarter of 2019 and 28% on a two-year CAGR basis. This growth rate surpassed the company’s three-year CAGR of 19% leading up to the pandemic and it is also ahead of the two-year CAGR of 25% reported in the first quarter of 2021.
Lululemon recorded double-digit revenue increases in both its North America and international markets, with growth across each of its major regions. Revenue from the store channel rose 142% YoY. The company is confident that it will surpass its 2023 revenue target by the end of this year which would be two years ahead of schedule.
For the third quarter of 2021, Lululemon expects revenue to range between $1.40-1.43 billion. For the full year of 2021, the company raised its revenue outlook to a range of $6.1-6.2 billion from the previous range of $5.8-5.9 billion.
Adjusted EPS for the second quarter of 2021 rose to $1.65 from $0.74 in Q2 2020 and $0.96 in Q2 2019, and beat expectations. For the third quarter of 2021, adjusted EPS is estimated to be $1.33-1.38. For the full year, the company now expects adjusted EPS of $7.38-7.48 versus the prior range of $6.73-6.86.
Lululemon witnessed strong growth in ecommerce sales last year due to the pandemic. Digital sales comprised 61% of total revenue in Q2 2020. Although this rate has slowed down to 41% in Q2 2021 due to store reopenings, total digital revenue still increased 8% YoY to $597.4 million. Digital channel revenues increased 66% on a two-year CAGR basis surpassing the company’s expectations of a growth of approx. 55%.
Lululemon recorded a 49% YoY growth in revenue from its international markets in Q2. Revenue increased 43% on a two-year CAGR basis. The company is seeing good growth across all its international markets with particular strength in China.
Lululemon plans to open 35-40 stores in its international markets this year. The company sees opportunity for revenue growth and margin expansion in its international markets and it is on track to quadruple its international business by 2023.
Click here to read the full transcript of Lululemon Athletica’s Q2 2021 earnings conference call
Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!
These fast-food stocks can strengthen your portfolio this year. Here’s why
For American restaurant chains, the early months of the pandemic were a challenging period. But soon things changed for the better as people started ordering their favorite food items online
What to expect when McCormick & Company (MKC) reports Q1 results next week
Shares of McCormick & Company, Incorporated (NYSE: MKC) were up over 2% on Friday. The stock has dropped 12% year-to-date. The condiments manufacturer is scheduled to report its first quarter 2023
KB Home (KBH) Earnings: 1Q23 Key Numbers
KB Home (NYSE: KBH) reported total revenues of $1.38 billion for the first quarter of 2023 which was relatively flat compared to the same period last year. Net income of