KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Lululemon Athletica (LULU.US) faced challenges in its U.S. market in the third quarter but saw strong international sales that bolstered its bottom line, driving an 8% after-hours stock rally on Thursday.
Key Earnings Highlights
- Revenue: $2.4 billion (+9% YoY), in line with FactSet consensus of $2.36 billion.
- Net Income: $352 million ($2.87 per share) vs. $249 million ($1.96 per share) in Q3 2023.
- Adjusted EPS: $2.53, below expectations of $2.71.
Same-Store Sales Performance
- Overall: Increased 4%.
- Americas: Declined 2%, reflecting weak demand and muted product palettes.
- International: Soared 25%, driven by robust demand outside the U.S.
Analyst Concerns and Improvements
- Muted Color Palette:
- Analysts at William Blair attributed some U.S. sales softness to muted color choices, which impacted early outerwear sales during a warm fall.
- Recent brighter color assortments (cerulean blue, mauve, bright pink) are boosting holiday season sales, validating management’s claims of "self-inflicted" issues earlier in the year.
Q4 and 2024 Guidance
Q4 Revenue:
- Projected at $3.475–$3.510 billion (+8–10% growth), aligning with FactSet consensus of $3.50 billion.
Q4 EPS: $5.56–$5.64, in line with expectations.
Full-Year 2024 Revenue: $10.452–$10.487 billion (+9% YoY), surpassing consensus of $10.44 billion.
2024 EPS: $14.08–$14.16, exceeding FactSet expectations of $13.97.
Strategic Focus
Chief Financial Officer Meghan Frank highlighted the company’s dedication to expanding its customer base and strengthening consumer engagement. International growth, especially in Asia, is a key focus, as it offsets weaker performance in the Americas.
Stock Performance
- Year-to-Date Decline: Lululemon shares are down 33% in 2024, contrasting with the 27% gain for the S&P 500 index.
- The after-hours rally suggests investor optimism regarding improving holiday sales trends and brighter product offerings.
Takeaway
While Lululemon faces challenges in the U.S., its strong international growth and adjusted holiday strategy position the brand for recovery. Analysts and investors will closely monitor its Q4 results to assess whether the recent improvements in product offerings can drive sustained gains in the Americas.
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