Wall Street Breakfast Podcast: Lingerie, Leggings, Beauty

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Lululemon (LULU) delivers solid quarterly results, hikes FY24 guidance. (00:26) Ulta Beauty (ULTA) shines with solid Q3 performance. (01:55) Victoria’s Secret (VSCO) ups forecast, tops estimates for Q3 results on holiday season boost. (03:14)

This is an abridged transcript of the podcast.

Lululemon (NASDAQ:LULU) delivered solid quarterly results.

LULU is up 9% in premarket action with better-than-expected profit and sales, and double-digit comparable sales growth in its international markets.

LULU earned a profit of $2.87, up from $1.96 a year ago and 15 cents above expectations. Revenue increased 9% to $2.4B, $40M above estimates.

Comparable sales remained soft in the U.S., falling 2% from the same quarter last year, but were offset by a 25% surge in international sales, resulting in a 4% increase in comparable sales across all segments. Comparable sales for all three segments were better than expected.

Looking ahead to the remainder of the year, Lululemon (LULU) is counting on a strong holiday season to underpin sales for both Q4 and 2024.

For Q4, Lululemon is targeting revenue of $3.475B to $3.510B, representing growth of 8% to 10%, with earnings expected to be between $5.56 to $5.64 per share, both of which bracket the consensus estimates of $3.50B and $5.62 per share.

The company also raised its FY24 guidance above Wall Street’s expectations and raised its share buyback program by another billion dollars.

Ulta Beauty (NASDAQ:ULTA) turned around an ugly second quarter with a strong third quarter performance as the company’s efforts to reinforce its market position and re-engage customers gains traction.

The cosmetics retailer realized gains in both sales and profits and turned negative comparable sales in Q2 into a gain of 0.6% in Q3, better than expectations for another contraction of 2.0%.

The company earned a profit of $5.14 per share, up from $5.07 last year, and $0.62 better than expected. Revenue increased modestly, but was $30M higher than the street anticipated.

For the remainder of the year which includes the rest of the holiday shopping season, Ulta (ULTA) raised its bottom-line sales outlook to a range of $11.1B to $11.2B from prior guidance of $11.0B to $11.2B and profit guidance to $23.20 to $23.75 per share from an earlier range of $22.60 to $23.50 per share. These forecasts compare favorably to the consensus estimates of $11.17B and $23.13, respectively.

Ulta (ULTA) is up 11% premarket.

Victoria’s Secret (NYSE:VSCO) on Thursday raised its full-year forecast and posted a results beat for the third quarter, driven by shopping momentum in the ongoing holiday season.

The company now expects 2024 net sales to be up about 1% to 2%, compared to prior guidance of down nearly 1%.

In the third quarter, the company saw mid-single-digit growth in North America and over 20% growth from their international business.

“We are excited to see our momentum from the third quarter continue through Black Friday and Cyber Monday. Our merchandise offering and giftable product assortments are resonating with the customer and driving traffic both in stores and online,” the company said in a statement.

Net loss for the quarter narrowed to $25.1M, compared to a net loss of $67.7M for the same period last year.

On an adjusted per-share basis, the company lost 40 cents, while analysts on average were expecting the company to lose 62 cents apiece.

Revenue rose 5.5% to $1.34B and beat consensus estimates.

Victoria’s Secret is up 3% in premarket trading.

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Catalyst watch:

• The European Commission’s Phase 1 review of Novo Holdings planned purchase of Catalent (CTLT) expires.

• The “go shop” period for Air Transport Services’ (ATSG) sale to Stonepeak expires.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are flat. Crude oil is down 0.7% at $67/barrel. Bitcoin is down 4% at $98,000.

In the world markets, the FTSE 100 is flat and the DAX is up 0.2%.

The biggest movers for the day premarket: DocuSign (DOCU) is up nearly 15% after the company posted strong FQ3 results and an upbeat FQ4 outlook.

On today’s economic calendar:

• 8:30 am Non-farm payrolls: Economists expect 200K job additions for the month and for the unemployment rate to tick up to 4.2% from 4.1%.

• 10:00 am Consumer Sentiment