Lululemon Earnings Are Coming. What to Expect.

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Lululemon Athletica

will report second-quarter results on Thursday. The athletic-apparel maker’s report will show if high-end shoppers, who have continued to spend, are still buying athleisure along with dressier clothing.

Analysts expect Lululemon (ticker: LULU) to earn $1.86 a share on revenue of $1.77 billion. That compares to earnings of $1.65 a share and revenue of $1.45 billion in the year-ago period.

The company’s fiscal fourth quarter, reported in March, was the first time Lululemon had missed sales estimates since the start of the pandemic. Its earnings per share haven’t missed expectations since the quarter ended May 2020.

Investors will be keen for clues on how Lululemon’s customers are behaving. Many retailers have seen consumers pull back in recent months, as inflation crimps budgets and Americans have prioritized experiences they put on hold during the pandemic over shopping.

That was evident in lowered full-year forecasts from companies such as

Walmart

(WMT),

Best Buy

(BBY),

Nordstrom

(JWN), and

Burlington Stores

(BURL), which warned people were pulling back on categories they stocked up on during lockdowns.

Yet higher-end shoppers haven’t seen the same pressures: Nordstrom net sales climbed double digits, boosted by demand for designer goods, even as its off-price Rack division saw more modest gains.

Macy’s

(M) likewise said that its tonier Bluemercury and Bloomingdale’s businesses were still recording same-store-sales growth, even as its flagship Macy’s stores struggled.

Likewise—even though dressier apparel has been in demand—athleisure is still popular, as evidenced by

Foot Locker
’s
(FL) better-than-expected results.

Therefore, investors will be keen to see if, like

Williams-Sonoma

(WSM), its higher-income customers can help Lululemon buck the industry’s downbeat trends.

Write to Teresa Rivas at [email protected]