Lululemon Athletica Inc. (NASDAQ:LULU) shares are trading lower Wednesday. The decline comes amid broader sector weakness, particularly following the earnings reports of other retail and athletic wear companies, such as Foot Locker Inc. (NYSE:FL) and Abercrombie & Fitch Company (NYSE:ANF).
Both companies reported better-than-expected earnings but failed to inspire confidence across the sector, leading to a sell-off that impacted Lululemon as well.
What To Know: Lululemon is set to release its second-quarter earnings on Thursday, Aug. 29, after market close. Analysts expect the company to report earnings per share (EPS) of $2.92 and revenue of $2.409 billion.
Foot Locker and Abercrombie & Fitch also reported their fiscal 2024 second-quarter earnings before the market opened on Wednesday.
Foot Locker: The company posted a loss of five cents per share, which was better than analysts' expectations of a seven cents per share loss.
Foot Locker also reported sales of $1.89 billion, slightly exceeding the $1.88 billion forecast. The company reaffirmed its adjusted EPS guidance for the 2024 fiscal year, projecting between $1.50 and $1.70.
During the quarter, Foot Locker opened five new stores but closed 41. Additionally, 14 stores were remodeled or relocated and 67 were updated to meet new design standards.
Abercrombie & Fitch: Abercrombie outperformed analyst estimates by reporting sales of $1.13 billion, surpassing the expected $1.10 billion, and an adjusted EPS of $2.50, above the $2.22 forecast. The company also anticipates third-quarter net sales to grow in the low double digits year-over-year.
Analyst Outlook: Despite the recent dip, analysts maintain a generally positive outlook on Lululemon.
Wedbush analyst Tom Nikic lowered his price target from $400 to $324 while maintaining an Outperform rating. Truist Securities analyst Joseph Civello maintains a Buy rating with a $310 price target.
The consensus analyst rating remains a Buy, with a price target of $387.72, indicating a potential upside of approximately 26.95%.
LULU Price Action: Lululemon's stock closed Wednesday down 4.55% at $258.83, according to Benzinga Pro.
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