Markets
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Luke Kawa

Marvell Technology jumps after raising sales guidance for the next two years

Marvell Technology’s robust outlook is carrying the day after the custom chip designer’s Q4 results came in only fractionally above estimates.

For the final quarter of its fiscal 2026, the custom chip designer reported:

  • Net revenue of $2.22 billion (estimate: $2.21 billion).

  • Adjusted net income per share of $0.80 (estimate: $0.79).

For Q1, management offered guidance for:

  • Net revenue of $2.4 billion, plus or minus 5% (estimate: $2.28 billion).

  • Adjusted net income per share of $0.79, plus or minus $0.05 (estimate: $0.75).

During the conference call, management said that full-year sales for fiscal 2027 would be “approaching $11 billion,” up from its guidance of “approximately $10 billion” in December.

“We expect Marvell’s overall revenue in fiscal 2028 to grow close to 40% year over year, reaching approximately $15 billion, roughly $2 billion higher than the outlook we provided in our December earnings call and driving our non-GAAP EPS to well over $5,” CEO Matt Murphy said on the conference call.

Wall Street estimated Marvell’s full-year sales for fiscal 2027 (roughly calendar year 2026) would be a little over $10 billion and a little less than $13 billion for the following year, roughly in line with the firm’s previous guidance.

Shares extended gains as much as 15% after this boost to the outlook, and are up double digits in premarket trading on Friday.

Last year, there was substantial confusion about the status of Marvell’s relationships with its two biggest hyperscaler clients going forward, with some analysts and media reports indicating that the firm was going to lose some of this business and others saying these custom chip programs remain on track.

Near the end of the conference call, Murphy detailed how “fired up” he was over these reports:

“I’m going to ignore the noise. I mean, if you actually look at last year and all the different things that came out and all the different noise that was out there, it was all wrong. I mean, you had actually analysts retracting notes. You had articles that weren’t even accurate at all. Honestly, it was all noise. Look at our results that we’re guiding. Look at our outlook for this year. Look at our outlook for next year. Do you see me blinking? You don’t.”

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Helena Cheng

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

markets
Paige Oamek

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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