Diamonds and Dogs

8/31/18

Lulemon Athletica (LULU) stretches higher. The athletic apparel stock is up 13% to new highs following earnings. Lululemon beat by 22 cents as revenues rose 24.5% year over year to $723.5 million. Gross margins were 54.8%, an increase of 360 basis points compared to the second quarter of fiscal 2017. The company issued upside guidance for the quarter and the full year. The new CEO who has been there for just two weeks said he has his dream job. Plenty of upgrades with price targets as high as $170 a share.

Big Lots (BIG) getting smaller. The home décor retailer is down 9% not far from a 52 week low following earnings. Big Lots missed estimates by 8 cents as sales rose just 0.2% year over year to $1.22 billion. Big Lots is expected to miss estimates for the third quarter and lowered guidance for 2019. Big Lots appointed a new CEO this week so maybe they kitchen sinked earnings guidance so they can look better going forward. That's the optimistic point of view.

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