Published - August 31st 2023 @ 10:07 AM (GMT+2)
As the financial quarter comes to a close, investors are keenly observing two retail giants set to announce their quarterly results on August 31, 2023: Lululemon and Dollar General. Both companies are industry leaders, and their performance could be indicative of broader market trends.
Lululemon: A Closer Look at Q2 Forecasts:
Lululemon (NASDAQ:LULU), a frontrunner in the athletic apparel sector, has garnered significant attention from both consumers and investors. The stock has seen a robust increase of +17% this year. LULU shares often experience a surge following strong quarterly results, particularly when these are coupled with optimistic future guidance.
Q2 Lululemon:
- Q2 earnings are expected to rise by 15% to $2.53 per share, compared to $2.20 in the same quarter last year.
- Q2 sales are predicted to ascend by 16% to $2.17 billion, up from $1.87 billion a year ago.
Zacks Investment Research suggests that Lululemon could outperform market expectations. Their Expected Surprise Prediction (ESP) model forecasts a Q2 EPS of $2.58, which is 2% higher than the Zacks Consensus.
Dollar General: Q2 Projections and Challenges
Dollar General (NYSE:DG), one of America's largest discount retailers, offers valuable insights into consumer shopping trends. However, the company has faced challenges this year, including reduced store traffic that has negatively impacted profits. Consequently, the stock has plummeted by -36% YTD. Despite this,
Q2 Dollar General:
- Q2 earnings are projected to decline by -16% YoY to $2.49 per share.
- Sales are expected to rise by 5% to $9.94 billion.
Wall Street's Outlook on Both Companies
The financial community is divided over the strength of the American consumer. Lululemon is aggressively pursuing international expansion, with operations in eight countries, including France, Germany, and the U.K.
The company also plans to enter the Spanish market, with annual earnings expected to increase by 18% in fiscal 2024 to $11.93 per share and another 15% to $13.78 in FY25.
Dollar General's Expansion Plans
Dollar General, primarily focused on the U.S. market, also has operations in Mexico. The company has opened 212 new stores in Q1 and aims to inaugurate 1,050 more this year. Despite a projected -6% dip in annual earnings for FY24, the company expects an 8% rise in FY25 to $10.86 per share. Additionally, Dollar General offers an attractive 1.52% dividend yield.
Both Lululemon and Dollar General hold a Zacks Rank #3 (Hold) ahead of their Q2 announcements. Their growth and expansion strategies look promising, but the forthcoming guidance will be pivotal for the future of LULU and DG shares.
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