lululemon stock jumps on positive earnings

LULU Rallies Past Expectations on Revenue and EPS Beat

By:Mike Butler

LULU kicks inflation & cost of goods worries aside with a great earnings report on March 28th 2023 – the company exceeded expectations from a revenue & earnings per share (EPS) standpoint, sending the stock surging $45.79 higher when the market opened on Wednesday. The stock moved almost twice the market’s expected move for the earnings announcement, which was just under $24 for the rest of the week based on current implied volatility levels. The stock opened at $366.10 on Wednesday, March 29th.

  • Earnings per share - $4.40 vs $4.26 expected
  • Revenue - $2.77 billion vs $2.7 billion expected

With this report in the books, LULU sets its sights on future growth, trying to reclaim the stock price highs of December 2022:

lululemon stock price post earnings

This gap in price to the upside in LULU looks and is extraordinary relative to future expectations for the stock price:

lululemon stock implied volatility

The implied volatility landscape of an options market can tell us a lot about a stock price’s expectations.

If we look out to the May 2023 options expiration cycle, the expected stock price move is around +-30 points from the current price, which doesn’t even exceed the intra-day move the stock is realizing today.

Looking further through the end of the year to January 2024, the expected stock price move based on current implied volatility levels is +-90 points – clearly, the bulls won today in LULU. Time will tell to see if LULU can regain the all-time high of $485.66 the stock reached in November of 2021.

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