Lululemon’s Brand Loyalty & Expansion Opportunities In Focus, Analyst Sees Attractive Entry-Point For Investors

/ / Consumer Discretionary /

Truist Securities analyst Joseph Civello initiated coverage on Lululemon Athletica Inc. (NASDAQ:LULU) with a Buy rating and price target of $500. According to the analyst, Lululemon has some of the strongest brand loyalty in the activewear industry as its direct-to-consumer (DTC) model enables it to invest more in products & foster deeper customer relationships. The analyst writes that even in today’s macro-pressured/promotional environment, LULU’s demand/full-price selling remains robust. Civello sees ample growth opportunities as it rapidly expands in key areas (men’s, digital, & international). From high-tech fabrics that offer the best fit/feel to its fashion-forward designs, customers have shown they’re willing to pay a premium for LULU products, per the analyst. Further, despite leading earnings visibility, LULU’s premium to peers/the market remains at/below historical levels, which creates an attractive entry-point for a best-of-breed name, the analyst adds. The analyst forecasts a 15% revenue CAGR from 2022-2025E. Further, given LULU’s solid cost controls, the […]

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Walmart Could Maneuver In A Deflationary Environment

/ / Consumer Discretionary /

Walmart CEO Doug McMillon is warning that a period of deflation could be coming in the next few months, but the retailer is better positioned than most to manage such an environment, Baird analysts say in a research note. While falling prices ratchet up the need to sell more units, customers are responding well to price rollbacks that are funded by Walmart’s vendors, and paying less for food should free up dollars for more spending on general merchandise, the analysts say. They recommend buying Walmart’s stock after the past week’s pullback.

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Estée Lauder Divided About Succession Planning

/ / Consumer Discretionary /

Estée Lauder’s founding family and board are divided about how to regain investors’ confidence after seeing its stock price plunge by 50% this year. Chairman Emeritus Leonard Lauder, who built his mother’s company into an empire, and some board members, are dissatisfied with CEO Fabrizio Freda, according to people familiar with the matter. Freda’s biggest supporter remains Executive Chairman William Lauder, the people said. Jane Lauder, family member and marketing executive at her grandmother’s company, and Executive Group President Stéphane de la Faverie, are on the shortlist of internal CEO contenders. Some board members are considering external candidates in addition to internal ones to succeed Freda, the people said.

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Estée Lauder’s Investment in Japan Plant Becomes An Issue

/ / Consumer Discretionary /

Estée Lauder’s decision to invest roughly $1 billion in a new manufacturing plant in Japan to further support Chinese sales may hamper profits as the company reduces production levels. The beauty company built the factory to eventually manufacture about 300 million units a year, but it’s only expected to produce tens of millions of units in 2024. In the September quarter, the company posted about a 20% drop in skin-care sales, mainly driven by China and its travel retail business. Other big companies are confronting a China slump. P&G, owner of Japanese skin care brand SK-II, and Tokyo-based rival Shiseido have seen sales declines in China after consumers turned away from Japanese merchandise after Japan started to release water from the Fukushima Daiichi nuclear plant into the Pacific Ocean.

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CFRA Cuts Rating On Shares Of Trane Technologies Plc To Hold From Buy

/ / Industrials /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We keep our 12-month price target at $229 on a forward P/E of 23x our ’24 EPS estimate, in line with the five-year average. We keep our ’23 EPS estimate as $8.98, ’24’s as $9.94, and ’25’s as $10.98. Our outlook on sales, margins, and EPS has not changed; however, we think shares are at fair value, and do not provide upside at this time.

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Applied Materials Announces Fourth Quarter and Fiscal Year 2023 Results

/ / Technology /

Applied Materials Announces Fourth Quarter and Fiscal Year 2023 Results — Quarterly revenue $6.72 billion, flat year over year — Quarterly GAAP EPS $2.38 and non-GAAP EPS $2.12, up 29 percent and 4 percent year over year, respectively — Annual revenue $26.52 billion, up 3 percent year over year — Annual GAAP EPS $8.11 and non-GAAP EPS $8.05, up 9 percent and 5 percent year over year, respectively SANTA CLARA, Calif., Nov. 16, 2023 (GLOBE NEWSWIRE) — Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its fourth quarter and fiscal year ended Oct. 29, 2023. Fourth Quarter Results Applied generated revenue of $6.72 billion. On a GAAP basis, the company reported gross margin of 47.1 percent, operating income of $1.97 billion or 29.3 percent of net sales, and record earnings per share (EPS) of $2.38. On a non-GAAP adjusted basis, the company reported gross margin of 47.3 percent, operating

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Applied Materials Fiscal Q4 Earnings Up, Revenue Lower, Issues Q1 Guidance

/ / Technology /

Applied Materials (AMAT) reported fiscal Q4 adjusted diluted earnings Thursday of $2.12 per share, up from $2.03 a year ago. Analysts polled by Capital IQ expected $1.99. Revenue for the quarter ended Oct. 29 was $6.72 billion, down from $6.75 billion a year earlier. Analysts surveyed by Capital IQ expected $6.5 billion. The company said it expects fiscal Q1 adjusted diluted earnings of $1.72 to $2.08 per share. Analysts surveyed by Capital IQ expect $1.83. The company expects revenue for the quarter of $6.47 billion, plus or minus $400 million. Analysts polled by Capital IQ expect $6.37 billion.

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Walmart Reports 3Q revenue of $160.8 billion, up 5.2%

/ / Consumer Discretionary /

Walmart reports strong revenue growth of 5.2% with strength across segments; eCommerce up 15% globally; GAAP EPS of $0.17; Adjusted EPS of $1.53; Raises FY24 sales and Adjusted EPS guidance BENTONVILLE, Ark.—-November 16, 2023– Walmart Inc. (NYSE: WMT): This press release features multimedia. View the full release here: Third-quarter highlights: — Consolidated revenue of $160.8 billion, up 5.2%, or 4.3% in constant currency (“cc”) — Consolidated gross margin rate up 32bps positively affected by a slight improvement for Walmart U.S. and timing of Flipkart’s The Big Billion Days (“BBD”) event, which flipped from Q3 last year to Q4 this year — Consolidated operating expenses as a percentage of net sales down 182bps, lapping a discrete charge from last year. On an adjusted basis, up 37bps on variable pay expenses and store remodels — Consolidated operating income up $3.5 billion, or 130.1%, adjusted operating income up 3.0% positively affected by the

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