Market Minute: Earnings Preview: WOOF, WGO, LULU
Earnings season is over, and investors have turned their attention to economic data, tariffs, and the Fed. Still, don’t forget about the scattered big names reporting this week, including Petco (WOOF), Winnebago (WGO), and Lululemon (LULU).
Zacks expects Petco (WOOF) to report 4Q24 EPS of $0.02 (flat growth year-over-year) and revenue of $1.55 billion (-7% year-over-year) after the bell today. Rival Chewy (CHWY), which reported this morning, beat estimates with over $3B in revenue. Petco has some catching up to do: can they take advantage of their brick-and-mortar footprint, which Chewy lacks, or hone their e-commerce and veterinary side?
WOOF shares are down over 35% year-to-date – but up 24% over the last year. Is this a discount on a well-established brand, or has the Street correctly written them off?
Winnebago (WGO) reports 2Q25 tomorrow in the premarket. Zacks estimates EPS of $0.19 (-80% year-over-year) and revenue of $609 million (-13% year-over-year), so a rough quarter for Winnebago. Despite these dour estimates, the company has kept up its quarterly dividend.
Last quarter was a surprise loss, with WGO citing consumer focus on low-price products and a drop in RV and towable sales. However, its Marine business surprised to the upside. Has the macro environment changed enough to bring consumers back, or is Winnebago stuck in the mud for a while? WGO shares are down 28% year-to-date, and down a whopping 51% over the last year.
Lululemon (LULU), the biggest of our three, reports tomorrow after the bell. Zacks anticipates 4Q24 EPS of $5.87 (+11%) and revenue of $3.59 billion (+12%). Despite these strong growth expectations, LULU shares are down 12% year-to-date and 16% over the last year, potentially offering a discount. China is a major manufacturing hub for LULU, so the market may be anticipating tariff impacts there. A recent Jefferies note sounded the alarm on the company, saying it is likely to see U.S. sales fall in 2025 for the first time in its history. The analyst cited increased competition, and said its attempts to diversify its product lines weren’t working. The options market has an implied move of $28/share, or about 8%.
Tune into the Schwab Network for earnings breakdowns and more!
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