Yahoo Finance Will Currency Woes Hurt Lululemon's (LULU) Q2 Earnings?
Lululemon Athletica Inc. LULU is slated to report second-quarter fiscal 2016 results on Sep 1, after the closing bell. The company’s past performance reveals that it outpaced the Zacks Consensus Estimate by an average of 0.2% in the trailing four quarters. Let’s see how things are shaping up for this announcement.
LULULEMON ATHLT Price and EPS Surprise
LULULEMON ATHLT Price and EPS Surprise | LULULEMON ATHLT Quote
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Lululemon is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Lululemon has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 38 cents. Lululemon’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
Factors Influencing this Quarter
Lululemon is one of the leading yoga-inspired athletic apparel and accessories retailers with operations across North America. Additionally, it holds a significant position in the market due to its superior product designs and premium pricing. The company is also undertaking initiatives to drive top-line growth by developing its eCommerce retailing channel and investing in the innovation of new product categories.
Further, Lululemon exhibits immense long-term growth opportunity in the industry, based on its potential to expand square footage and enhance its business globally. Also, management’s new strategy that outlines four major areas of growth, aimed at doubling revenue and more than doubling earnings by 2020, bodes well.
However, the company continues to battle currency headwinds, which have been hurting results for quite some time. Despite a flattering outlook for fiscal 2016, Lululemon’s results are expected to be affected by currency fluctuations. Earlier, management anticipated earnings for the second quarter in the range of 36–38 cents per share, compared with 34 cents earned in the year-ago quarter. Nonetheless, estimates have been stable ahead of the company's second-quarter earnings release.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Francesca's Holdings Corporation FRAN has an Earnings ESP of +11.11% and a Zacks Rank #2 (Buy).
The Kroger Co. KR has an Earnings ESP of +2.22% and a Zacks Rank #3.
Casey's General Stores, Inc. CASY has an Earnings ESP of +0.56% and a Zacks Rank #3.
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LULULEMON ATHLT (LULU): Free Stock Analysis Report
CASEYS GEN STRS (CASY): Free Stock Analysis Report
KROGER CO (KR): Free Stock Analysis Report
FRANCESCAS HLDG (FRAN): Free Stock Analysis Report
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