Diamonds and Dogs
Lululemon Athletica (LULU) stretching higher. The athleisure wear retailer is jumping 17% following strong earnings. Lululemon also raised second quarter and full year earnings and sales guidance. The company's recent push to renovate stores paid off in the latest reported quarter, with traffic rising in the mid-single digit range. Direct-to-consumer revenue, which includes online sales, rose 62 percent in the first quarter, helping the company record a profit of 55 cents per share. Barclays raised its price target by $50 to $150, saying they were "hard-pressed to find anything negative" in first-quarter numbers.
Big Lots (BIG) is getting smaller. The Columbus-based discount retailer is down 5% to a two year low following disappointing earnings. The drag on sales came from the seasonal department, which had a double-digit drop in comparable sales. Big Lots incurred $8.7 million in after-tax expenses, or about 21 cents a share, related to the $38 million settlement of a shareholder lawsuit and the retirement of CEO David Campisi. Going forward, the company anticipates positive comparable store sales in each of the next three quarters. Business has improved in May when the cold weather finally broke and warmer temperatures arrived.
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