KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Key Takeaways for Investors:
- Q4 Beat Expectations, But That’s Not the FocusLululemon posted strong Q4 earnings of $6.14 per share, beating estimates of $5.85. Revenue came in at $3.6 billion, up 13% and in line with forecasts. But the stock dropped 5.9% in after-hours trading.
- FY25 Guidance Disappoints Wall StreetManagement expects FY25 revenue of $11.15–$11.3 billion, which implies growth of just 5%–7%, below the 7% consensus. EPS guidance of $14.95–$15.15 also missed expectations ($15.37).
- Soft Q1 Outlook Fuels ConcernFor Q1, Lululemon sees revenue of $2.335–$2.355 billion and EPS of $2.53–$2.58 — both short of analyst forecasts. This adds to investor anxiety about slowing consumer demand and rising competition.
- Traffic and Competition Trends Add PressureIn-store traffic dipped in February, while rivals like Alo Yoga saw double-digit growth. Analysts point to rising competition from brands like Vuori — and Nike's Skims partnership — as growing threats to Lululemon’s market share.
- Valuation Reset Creates Opportunity?The stock is down 12% year-to-date and now trades at 21.6x forward earnings, well below its 5-year average of 36.7x. If spring sales rebound, some analysts believe there’s room for upside.
Investor Insight:
While Lululemon is still a premium brand with strong margins, its soft guidance reflects broader retail headwinds. Management’s cautious tone may be “prudently conservative,” but with traffic trends weakening and competition intensifying, investors will want to see signs of a strong spring rebound before jumping back in.
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