Why Lululemon Raised Earnings Guidance to High End of Range

Earnings season is ramping up again. While there are relatively few reports coming out this week, we’ve seen a number of companies announce changes to guidance, either for the December quarter or for the full year. Here are Monday’s highlights.

Gilead Sciences

Gilead Sciences Inc. (NASDAQ: GILD) raised its fiscal year 2020 sales guidance from a range of $23.0 billion to $23.5 billion to a new range of $24.3 billion to $24.35 billion. Estimated adjusted diluted earnings per share (EPS) was raised from a previous range of $6.25 to $6.60 to a new range of $6.98 to $7.08. On a GAAP basis, EPS guidance was modified from a prior range of −$0.25 to $0.10 to a new range of −$0.08 to $0.02. Analysts had forecast 2020 sales at $23.71 billion and adjusted EPS at $6.61.

Gilead Sciences stock traded up fractionally early Monday to $63.88, in a 52-week range of $56.56 to $85.97. The consensus price target on the stock is $72.35. Gilead pays a dividend yield of 4.31%. The company has not set a date for its earnings announcement.

Lululemon Athletica

Citing uncertainty related to the COVID-109 pandemic, Lululemon Athletica Inc. (NASDAQ: LULU) had declined to offer guidance for its 2020 fiscal year. On Monday morning though, the company said it expects revenue and earnings to come in at the “high end of its prior range of expectations” for the fourth quarter. Revenue for the quarter is now forecast to rise by a high-teens percentage compared to fourth quarter 2019 sales, and adjusted diluted EPS are now expected in the high mid-single digits. Analysts had forecast fourth-quarter sales of $1.66 billion and EPS of $2.51. These estimates imply growth of 18.5% in sales and about 9.3% in EPS.

Lululemon Athletica stock traded down about 1.5% in Monday morning, at $359.85 in a 52-week range of $128.85 to $399.90. The company is expected to report quarterly results in late March.

GW Pharmaceuticals

GW Pharmaceuticals Inc. (NASDAQ: GWPH) reported preliminary results for the fourth quarter and full fiscal year. The company said it expects net quarterly sales of $148 million in the fourth quarter and approximately $526 million for the fiscal year. Epidiolex sales are forecast to rise 70% year over year to $144 million in the quarter and by 72% to approximately $510 million for the full year. Epidiolex is its cannabis-based treatment for certain types of seizures. Analysts had forecast quarterly sales of $140.44 million and full-year sales of $519.52 million, along with a quarterly net loss per share of $0.82 and a full-year loss per share of $1.85.

GW Pharmaceuticals stock traded up about 1.4% to $129.95, in a 52-week range of $67.98 to $144.00. The consensus price target is $182.81, and the company is expected to report financial results at the end of February.

Monday also marks the start of JPMorgan’s annual health care conference. Hundreds of biotech and biopharmaceutical companies are expected to make virtual presentations related to product pipelines and other company news.

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