Jim Cramer voiced skepticism about Lululemon Athletica Inc.‘s (NASDAQ:LULU) latest earnings, posting on X, "I don't know how LULU could be pleased with how the quarter ended but not like how the next quarter began!"
What Happened: His comments followed a sharp after-hours selloff in the stock, which fell over 10% after the company issued weaker-than-expected guidance.
Lululemon reported fourth-quarter revenue of $3.61 billion, surpassing analyst estimates of $3.57 billion. Earnings per share came in at $6.14, exceeding expectations of $5.85 per share, according to Benzinga Pro. Year-over-year, revenue rose 13%, with international sales surging 38% while Americas revenue grew just 7%.
The company ended the quarter with $2 billion in cash and a total store count of 767 after opening 18 net new stores. Inventory levels increased 9% year-over-year to $1.4 billion.
Why It Matters: Despite strong results, Lululemon’s first-quarter guidance disappointed investors. The company expects revenue between $2.335 billion and $2.355 billion, missing the consensus estimate of $2.39 billion.
CEO Calvin McDonald remained optimistic, emphasizing Lululemon's “Power of Three ×2 growth plan,” which aims to double revenue to $12.5 billion by 2026. However, investors reacted negatively, with the stock closing at $341.53 before plummeting to $307 in after-hours trading.
Analysts remain divided. Lululemon has a consensus price target of $396.19, with Oppenheimer setting a high of $500, while Jefferies issued a low target of $220. Recent ratings from Needham, Citigroup, and Telsey Advisory Group imply a 30.84% upside.
Price Action: Lululemon stock closed at $341.53 on Thursday, up 1.11%. After hours, it fell 10.11% to $307. The stock is down 8.27% year to date and 12.31% over the past year.
Lululemon is experiencing strong growth and momentum, according to Benzinga Edge, but its short- and medium-term price trends remain weak. For deeper insights, sign up for Benzinga Edge.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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