In Friday’s stock trading, watch for the reaction of a pair of retailers that posted quarterly results last night.
Lululemon (LULU) reported third-quarter GAAP EPS of $2.87. Revenue increased by 9.1% Y/Y to $2.4 billion. For the year, the firm expects revenue to grow by up to 9%. The stock reversed from a “growth is over” story from three months ago to a growth sensation.
LULU stock is an attractive investment. Margins continued to improve. In addition, the addressable market is expanding outside of the U.S. markets. Once the U.S. economy improves on lower interest rates, Lululemon may raise its forecast again.
Ulta Beauty (ULTA) gained 11% in after-hours trading. The firm posted a 1.6% Y/Y increase in revenue, to 42.53 billion. For FY 2024, Ulta narrowed its comparable sales growth to negative 1.0% to 0%. The company took advantage of its cheap stock price through a share buyback
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In the AI segment, SoundHound AI (SOUN) jumped by 31.33%. The firm presented its AI-powered conversational voice products. It also won a deal with Torchy’s Tacos.
Beware of SOUN stock. The chances are high that the company will issue new shares to take advantage of the stock price surge. Historically, the firm loses more as revenue rises. This is not a sustainable business model.
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