Labor Day weekend is here. A shortened week in the stock market is set with Monday being a day off. But as with any week, there are stocks to watch out for that are reporting earnings. Lululemon’s earnings report is a tricky one because the retail sector has had some major variations from one company to another.
Lululemon Athletica Inc. will be the first major stock to announce their earnings report. They are going to report on Tuesday, September 8th. Lululemon is coming off a bad week, but that had more to do with the stock market pulling back. They lost 5% last week but they are still up more than 100% since their low-point in March 2020.
Lululemon’s Earnings Report Hard to Judge
Lululemon’s earnings report is a tricky one to analyze, as is the case with many other retail companies due to COVID. You would assume that revenue took a hard hit due to temporary store closures and more mindful spending on necessities by consumers. But there’s also the case that revenue could have been relatively unfazed by COVID because of an increase of home workouts. With almost every gym being closed at one point, people sought out activewear for working out outdoors or at home.
Many reports are stating that Lululemon is currently overvalued due to its massive gains over the last 6 months. But investors don’t seem to mind too much if a company appears overvalued. Many investors have priced in expected success to companies like Tesla in particular.
I personally do not see Lululemon’s earnings report showing good numbers but the outlook might be able to save the day. If I had to chose a play for Lululemon, I would short it simply because I believe they might have lost market share to other big name brands like Nike and Gym Shark. Lululemon does have great potential for long-term growth but next week, I expect it to go down.
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Do not base any investment decision on anything that you read on this post. I am not qualified nor licensed to provide advice on stocks and investing. This is an opinion piece mainly mean to spread some information about a certain situation. All claims in this article are speculative and should not be taken as advice. I do not own or plan on owning any stock or options from the companies mentioned above.