Lululemon Athletica (LULU) is set to report Q3 earnings after the market closes today (the co reported at 4:05PM ET last quarter) with a conference call to follow at 4:30 PM ET. 

Current Capital IQ estimates Q3 diluted EPS of $0.52 (vs $0.47 last year) on revs +12% Y/Y to $610 mln. Estimates for total comps is +5.2%

  • The Co typically provides guidance for the next quarter and FY in the press release.
    • Current Cap IQ estimates Q4 EPS of $1.17 on revs +10% Y/Y to $866 mln
    • Current Estimates are for Q4 comps of 4.3%
  • Last quarter the co reported beat on both EPS and revs and provided upside guidance. 
    • Direct to consumer net revenue (e-commerce) +29% or 16% excluding impact of warehouse sale
  • Q3 Guidance: EPS of $0.50-0.52, excluding non-recurring items, on Revs of $605-615 mln.
    • Expects Q3 comps increase of mid single digit range ex-fx
  • FY 18 Guidance: EPS of $2.35-2.42, excluding ivivva restructuring impact
    • Expects comps to increase in the lsd range on a constant dollar basis
    • Expects revs of $2.545-2.595 bln
    • Comps increase in the low single-digit range on a constant dollar basis

Price action suggests investors are somewhat hesitant of another big gap down happening due to poor earnings and the stock has been in wait and see mode for the last couple weeks as volume has essentially dried up heading into the report. This sets up for a potentially explosive move in either direction after the print.

TECHS:

LULU has been mired in a 4 year range between 36 and 82. More recently, 69 has been the recent lid on the stock and has presented some serious resistance. A break above that 70 level should propel investors back into the name as believers. Personally, I would not be surprised to see a dip back down to 62-63 to shake out the weak before a resumption higher. It's because of that I have an upside bias in the name, especially above 70.