2 Stocks to Watch This Week
Earnings season is slowing down a bit, but there are still some big companies to watch this week. Two big names in apparel and food/hospitality are on the docket. lululemon athletica (NASDAQ: LULU) gets to set the tone for the rest of fiscal 2020 and hopefully give us insight into what's going to happen going into fall. And Dave & Buster's (NASDAQ: PLAY) investors are looking to see just how bad the damage from the COVID-19 pandemic is.
Of all the athletic/athleisure apparel companies, Lululemon has been a gem. In its last two fiscal years, the company reported revenue growth of 21% and 24%. Comp sales grew a whopping 17% for the fiscal year that ended on Feb. 2, with gross profit jumping 22% to $2.2 billion. With gross margin of 55.9% last year, this is simply a well-run business.
The caveat, as I have pointed out in the past, is the premium demanded for shares. Going off of last year's earnings of $4.93 per diluted share, Lululemon stock carries a trailing P/E ratio of 73 times earnings. That's not a cheap stock price.
Source Fool.com
