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Lululemon’s Price Surged on Record Earnings

What You Need To Know

Last week, Lululemon’s share price spiked 12% after it announced its 2nd quarter results.

Year-on-year, Lululemon reported a 61% increase in revenue. While the last year results were impacted by the pandemic as most of its stores were closed, its revenue still increased by 28% on a two-year compound annual growth rate. Its e-commerce business contributed 41.2% of its total revenue.

What does this mean?

Based on its current runrate and forecast, Lululemon is ready to achieve its 2023 revenue target by end if this year, which is two years ahead of its schedule! Calvin Mcdonald, CEO of Lululemon announced that the company will refresh its financial targets after the holidays season.

What are the potential risks?

While the management is positive on the outlook, Lululemon reminded that its outlook does not take into consideration any future impacts of Covid-19. Besides, the company is still facing supply chain constraint, with shortage of cargo containers and truck drivers.

Is it a buy?

Lululemon (NASDAQ:LULU) is definitely one of market leaders in the sport apparels industry, delivering strong results over the years. it always makes sense to collect its shares for long term investing. However, investors also need to be mindful that it is currently trading at its all time high.

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