Lululemon jumps higher after earning report

Lululemon reported its earning last night and it seems like investors are on board with the company’s business story and earning numbers that came in. The company’s shares LULU is trading at $427 per share, at a 21% increase year to date, and just a bit shy of its 52 weeks high.

Chief Executive Calvin McDonald added that Lululemon would be performing “even stronger,” if it weren’t for the supply chain headaches facing the retail industry today.

“Sales in the quarter probably could have been even stronger if we weren’t having to face some of those disruptions,” the CEO said during an interview Thursday morning with CNBC’s “Squawk Box.”

Telsey Advisory Group also raised its price target on Lululemon stock to $485 from $460. The average price target for Lululemon’s stock is now $434.20, according to FactSet.

Lululemon Athletica Inc. Announces Second Quarter Fiscal 2021 Results

For the second quarter of 2021, compared to the second quarter of 2020:

• Net revenue increased 61% to $1.5 billion. On a constant dollar basis, net revenue increased 56%.

• Company-operated stores net revenue increased 142% to $695.1 million.
• Direct to consumer net revenue increased 8% to $597.4 million. On a constant dollar basis, direct to consumer net revenue increased 4%.
• Net revenue increased 63% in North America, and increased 49% internationally.
• Direct to consumer net revenue represented 41.2% of total net revenue compared to 61.4% for the second quarter of 2020.
• Gross profit increased 72% to $842.7 million and gross margin increased 390 basis points to 58.1%.
• Income from operations increased 134% to $291.0 million. Adjusted income from operations increased 120% to $299.2 million.
• Operating margin increased 630 basis points to 20.1%. Adjusted operating margin increased 560 basis points to 20.6%.
• Income tax expense increased 123% to $83.1 million. The effective tax rate for the second quarter of 2021 was 28.5% compared to 30.0% for the second quarter of 2020. The adjusted effective tax rate was 27.9% for the second quarter of 2021 compared to 28.9% for the second quarter of 2020.
• Diluted earnings per share were $1.59 compared to $0.66 in the second quarter of 2020. Adjusted diluted earnings per share were $1.65 compared to $0.74 in the second quarter of 2020.
• The Company repurchased 0.5 million shares of its own common stock at an average price of $338.41 per share for a total cost of $171.1 million.
• The Company opened 11 new company-operated stores during the second quarter, ending with 534 stores.