What Happened?

Shares of athletic apparel retailer Lululemon (NASDAQ:LULU) jumped 5.2% in the morning session after data from Adobe Analytics, which tracks retail transactions, revealed that shoppers spent a record $10.8 billion online on Black Friday (2024), representing more than a 10% growth compared to the previous year, and more than double what consumers spent in 2017. 

This is a bullish 'read-through' for retailers and aligns with some of the positive sentiments and holiday spending trends observed by some of the companies that have reported this earnings season.

After the initial pop the shares cooled down to $333.66, up 4.1% from previous close.

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What The Market Is Telling Us

Lululemon’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 9 months ago when the stock dropped 18.9% on the news that the company reported fourth-quarter results and provided full-year revenue and earnings guidance, which fell short of Wall Street's estimates. 

On the other hand, Lululemon slightly topped analysts' revenue and EPS expectations during the quarter. The company's growth was driven by a 12% increase in its same-store sales, with American stores growing 7% and international stores growing 44% on a constant currency basis. Overall, it was a weaker quarter for Lululemon.

Lululemon is down 34% since the beginning of the year, and at $333.66 per share, it is trading 34.7% below its 52-week high of $511.29 from December 2023. Investors who bought $1,000 worth of Lululemon’s shares 5 years ago would now be looking at an investment worth $1,479.

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