Lululemon Profit on the Rise Following Website Revamp

Lululemon Profit on the Rise Following Website Revamp

If you are a big fan of athletic clothing then you’re probably familiar with the brand Lululemon. Lululemon is popular among many girls and women around the United States as stores are constantly popping up each and every year. To further their success, the brand has taken their in-store offerings and introduced them the world wide web. And boy, have they been successful.

According to Markets Insider, their e-commerce earnings gave them the boost they needed to beat their earnings for the fourth quarter of 2017. It’s also the reason analysts are extremely optimistic about the company’s prospects. Each year, the average United States consumer spends about $1,800 on e-commerce transactions.

Analysts projected the company to bring in $1.26 per share and $912.42 million in revenue. However, the retailer recently posted their earnings, which came out to $1.33 per share and a revenue of $928.80 million. Their e-commerce sales increased by 42% for the fourth quarter, which was already on top of the 12% increase from 2016. The company attributes their e-commerce boost largely to the relaunch of their website. The website was made to be easier for customers to shop on, and the appearance became more attractive. On Wednesday, March 28, the company saw a spike in their stock by 10%, just one day after releasing their earnings for 2017.

As a whole, the company plans to hit $4 billion in sales by 2020. This will include $1 billion from e-commerce, $1 billion from international sales, and $1 billion for men’s apparel sales. Many people, including some Wall Street analysts, believed this spike in their profit was bound to happen.

Wall Street analyst Credit Suisse’s Michael Binetti believes there are multiple reasons for the amp in sales. These reasons include the co-located men’s and women’s clothing stores, their continued e-commerce strength, and their increased capex investments. He has hopes for the company and raised his price target from $96 per share to $98. While many are optimistic, Jefferies analyst Randal Konik believes the company’s valuation is way too high. He placed a “hold” rating on Lululemon and made a price target of $82 per share.

The company plans to keep growing, so we will all just have to wait to see if they reach their goal.

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