Lululemon Athletica Inc. (NASDAQ:LULU) reported a higher-than-expected earnings per share (EPS) and revenue in the third quarter of fiscal 2024.
The company showed significant growth with a 9% increase in revenue and a more than 40% increase in net income year-over-year.
Despite challenges in North America, Lululemon demonstrates strong global performance and financial health, with a P/E ratio of approximately 24.37 and a current ratio of 1.57.
Lululemon Athletica Inc. (NASDAQ:LULU) is a prominent player in the athletic apparel industry, known for its high-quality yoga and fitness wear. The company competes with other major brands like Nike and Under Armour. On December 5, 2024, Lululemon reported earnings per share (EPS) of $2.87, surpassing the estimated $2.68. The company also achieved a revenue of approximately $2.4 billion, exceeding the estimated $2.36 billion.
In the third quarter of fiscal 2024, Lululemon reported an EPS of $2.87, beating the Zacks Consensus Estimate of $2.68. This was an increase from the $2.53 per share reported in the same quarter last year. The company’s revenue grew by 9% to $2.4 billion, surpassing analyst expectations, as highlighted by Zacks. Net income rose by more than 40% to $351.9 million, or $2.87 per share, compared to $248.7 million, or $1.96 per share, from the previous year.
Despite these positive financial results, Lululemon faced challenges with declining comparable-store sales in North America, its largest market. CEO Calvin McDonald acknowledged these challenges, particularly with product “newness.” However, he highlighted the company’s robust global performance and significant momentum in international markets and Canada. McDonald expressed optimism about the holiday season and emphasized the company’s focus on accelerating its U.S. business and enhancing brand awareness worldwide.
Lululemon’s financial metrics provide further insight into its market position. The company has a price-to-earnings (P/E) ratio of approximately 24.37, indicating the amount investors are willing to pay for each dollar of earnings. Its price-to-sales ratio stands at about 3.98, reflecting the market’s valuation of its revenue. The enterprise value to sales ratio is around 4.02, suggesting how the market values the company’s total worth relative to its sales.
Additionally, Lululemon’s enterprise value to operating cash flow ratio is approximately 17.44, providing insight into the company’s cash flow generation relative to its valuation. With an earnings yield of 4.10%, Lululemon offers a return on investment based on its earnings. The debt-to-equity ratio is 0.35, indicating a moderate level of debt compared to its equity. The current ratio of 1.57 suggests that Lululemon has a healthy level of liquidity to cover its short-term liabilities.
