Consumer Discretionary

Chipotle Board Approves 50-for-1 Stock Split — WSJ

/ / Consumer Discretionary /

By Sabela Ojea Chipotle Mexican Grill said it plans to do a 50-for-1 stock split to make its shares more accessible to employees and a broader range of investors. The restaurant chain said its board approved the first stock split in its 30-year history. The company will seek shareholder approval for the split at its annual meeting on June 6. The company’s stock closed Tuesday at $2,797.56, up 22% since the beginning of the year and 74% over the past 12 months. Should the stock split get approved, the stock would trade around $56, based on the closing price Tuesday. The company currently has about 27.4 million shares outstanding. If the split gets approved, shareholders would receive 49 additional shares for each share held, to be distributed after the market close on June 25. Chipotle’s shares are expected to trade on a post-split basis starting on June 26, the company

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Nike’s Earnings Are Coming. Analysts Are Telling Different Stories. — Barrons.com

/ / Consumer Discretionary /

Karishma Vanjani Nike will unveil its report card for the most recent quarter this Thursday. There is uncertainty on Wall Street about what it will show. Sam Poser of Williams Trading downgraded the shoe company’s stock to a Sell rating from Hold early Monday, forecasting that the stock will hit $85, which is 15% below its closing price on Friday. “Nike is losing its luster” and management isn’t doing enough to make it shine, he wrote. The quarterly profits are likely to be lower than Wall Street expects, while the company is likely to cut its financial forecasts, Poser said. While the consensus call on Wall Street is that earnings will be 75 cents a share for Nike’s third fiscal quarter, Poser expects 73 cents. Nike didn’t immediately respond to a request for comment. Nike’s stock has lost more than 8% in value this year and has yet to rebound

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Lululemon Athletica Faces Mixed Outlook on Soft US Q1, ‘Robust International Momentum,’ UBS Says

/ / Consumer Discretionary /

Lululemon Athletica (LULU) faces a mixed outlook among investors amid an expected “soft” Q1 US outlook countered by “robust international momentum,” UBS Securities said Monday in a report. “China’s trends looks robust, and soft US checks over the last three to four quarters have not resulted in weak earnings or guidance,” UBS said. “We see a very slightly negative upside/downside skew.” UBS said its data shows China momentum continuing, while industry web traffic indicates a deceleration for Lululemon. “Whatever plays out, we, we sense a large group of investors will be surprised,” UBS said. The investment firm kept its neutral rating on Lululemon and maintained the price target at $525. Results for Q4 and the full year are expected Thursday.

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Lululemon’s Fourth-Quarter Print Has Slight Negative Bias, Soft First-Quarter Trends May Drive Volatility, UBS Says

/ / Consumer Discretionary /

Lululemon Athletica (LULU) has a slight negative bias heading into the March 21 fourth-quarter print with solid holiday trends previously discussed by management, but soft first-quarter sales could lead to volatility after the event, UBS said. The brokerage is guiding for revenue growth of about 16% to $3.22 billion in the fourth quarter, slightly above the consensus view of $3.19 billion. Its adjusted earnings per share target of $5.02 is also above the Street’s view of $5, Monday’s emailed note showed. “We anticipate that the international region will be the primary driver of sales growth as it benefits from ongoing unit expansion and recovery of the Greater China region,” UBS analysts including Jay Sole and Mauricio Serna wrote. Lululemon demand likely remained robust in the quarter that included the key holiday shopping period, they said, with management commentary previously suggesting such a scenario. UBS is modeling sales growth of 10%

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