Lululemon’s Earnings Are Thursday. Here’s What to Expect.

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Lululemon athletica

could regain some ground lost in the recent retail selloff if the one-time pandemic winner delivers good news as it reports its quarterly results after the close on Thursday.

Analysts expect lululemon (LULU) to earn $1.43 a share from revenue of $1.55 billion. That would mark an increase from $1.16 in per-share earnings and revenue of $1.23 billion in the year-earlier period.

Lululemon
’s
focus on clothes for sports and wellness allowed it to outperform during much of the pandemic. The stock reached record highs in the second half of last year, but lululemon hasn’t been spared from the retail rout. Shares are down more than 7% over the past three months.

Some of that is attributable to the broader selloff in the sector and the market, but it is also down to the fact that investors are worried about the stock specifically.

The ups and more frequent downs of the latest earnings season highlight how consumers are changing their spending preferences, shifting toward experiences after stocking up on goods earlier in the pandemic. They haven’t completely pulled back from clothing, as evidenced by the success of dressier categories at department stores such as Macy’s (M) and

Nordstrom

(JWN), but that isn’t lululemon’s focus. More casual clothing like the yoga gear the company offers has been a hard sell for its peers.

Nonetheless, other casual retailers such as

Foot Locker

(FL) have defied the odds. And spending among wealthier people, lululemon’s target market, has been resilient even as inflation prompts other consumers to pull back.

Early on Wednesday, the stock was up 1.3% at $296.5122, but down about 24% so far this year. The

S&P 500
has lost almost 13% in 2022.

Write to Teresa Rivas at [email protected]