investors in the Nasdaq Composite (^ IXIC -1.15%) they have had a rough 2022, with the index mired in a severe bear market. Even after significant gains in recent weeks, the Nasdaq is far from regaining all the lost ground, and it looked as if the index would also take a modest drop when the market opened on Monday morning.
Even though most of earnings season is over, there are still a few key Nasdaq companies scheduled to announce their latest financial results this week, and what they say will have broader implications across the US economy. US that could end up moving all the shares. market. In particular, Lululemon Athletica (LULU) -2.79%) will provide a look at the key high-level retail sector when it publishes its quarterly report, while broadcom (AVGO -1.03%) will have a say in how the semiconductor industry is doing and what the outlook is for 2023.
Can Lululemon keep stretching higher?
Lululemon Athletica expects to hold its fiscal third quarter conference call after the close of the regular trading session on Thursday afternoon. The report for the period ending in late October should provide valuable insight into how the sportswear specialist has prepared for the key holiday season, and the additional information could give shareholders a better idea of what Lululemon has seen from the buyers after the end of the quarter.
Lululemon’s fiscal second quarter results for the period ended July 31 showed that the retailer continued to recover from the impacts of the COVID-19 pandemic. Net revenue increased 29% year-over-year to $1.9 billion, and comparable store sales increased 16%. Lululemon continued to perform well from its direct-to-consumer channel, where comps were up 30% from year-ago levels. Adjusted earnings of $2.20 per share were 33% higher than the same period a year ago.
At the time, Lululemon also projected strong growth for the third quarter and the full fiscal year. In particular, its calls for third-quarter revenue of between $1.78 billion and $1.805 billion and earnings of $1.90 to $1.95 per share remain largely consistent with what investors expect to see. watching Lululemon stock on Thursday.
What will worry investors the most, however, is what Lululemon thinks about its performance early in the holiday season. With conflicting readings from other retailers on whether inflationary pressures are preventing shoppers from making purchases, what Lululemon says will provide a valuable data point on the more affluent demographic that can and is willing to pay premium prices for its merchandise.
Broadcom intends to continue to hold up well
Broadcom is also scheduled to release its latest financial data on Thursday afternoon after the closing bell on Wall Street. The semiconductor maker has seen its shares pressured to some degree amid concerns about the potential impact of an economic slowdown on the industry, but share price declines have been muted compared to some of its peers. .
Broadcom’s previous results for the fiscal third quarter ending in July showed record strength. Revenue increased 25% year-over-year to $8.46 billion, and adjusted earnings of $9.73 per share were up 40% even more than the same period last year. The company noted robust demand from enterprise customers undertaking digital transformation efforts, as well as from various cloud-focused customers and service providers, reflecting the continued buildout of data centers and broadband and wireless capabilities.
That release also projected fiscal fourth-quarter revenue to be around $8.9 billion. Investors are still expecting exactly that amount of sales, which would be about 20% higher than last year’s levels.
Even if Broadcom’s earnings start to plateau at current levels, an earnings multiple of around 13 to 14 looks quite attractive even in the highly cyclical semiconductor industry. Investors will want to know how Broadcom intends to avoid excess capacity as its peers have ramped up production, and what the chipmaker says about customer demand could reverberate across the tech sector.