Markets
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Luke Kawa

Micron soars after reporting huge Q1 beat, with Q2 guidance ahead of every Wall Street analyst’s estimates

Micron is soaring double digits after the memory chip specialist posted stellar results for its fiscal Q1 2026 and a much better outlook for the current quarter than Wall Street anticipated after the close on Wednesday.

For Q1, the company reported:

  • Revenues: $13.64 billion (estimate: $12.95 billion)

  • Adjusted earnings per share: $4.78 (estimate: $3.95)

And the Street’s consensus was well ahead of even the upper ranges of the guidance provided by management for the quarter for sales of $12.5 billion (plus or minus $300 million) and $3.75 (plus or minus $0.15).

For Q2, management provided an outlook for adjusted revenues of $18.3 billion to $19.1 billion, and adjusted EPS of $8.22 to $8.62. Wall Street had penciled in revenues of $14.38 billion with adjusted EPS of $4.71.

Even the bottom end of the ranges management provided is well above the top analyst’s estimate for the quarter.

“We are in a very interesting environment where the aggregate demand for both DRAM and NAND is substantially higher than the ability to supply to it not just from a Micron perspective but even that aggregate industry level,” said Micron chief business officer and executive vice president Sumit Sadana. “So we are not really able to meet the demand for customers across any segment.”

These results may help spark a revival in semi stocks, which have gotten trounced in recent sessions. Hard disk drive sellers Seagate Technology Holdings and Western Digital are also rising on Thursday, as is flash memory seller Sandisk.

Micron has been one of the worst performers in the S&P 500 since last Thursday’s record close, down double digits from then until Wednesday’s close as investors broadly dumped AI names. Prior to that, shares had been on fire amid a bevy of Wall Street price target hikes and surging memory chip prices as demand runs ahead of supply. The AI boom has fueled a spike of immense appetite not only for GPUs and custom chips but also memory chips as well, as data centers also need a boatload of these to store information and feed it to those processors. Micron and its major competitors, SK Hynix and Samsung, have already sold out production for their most advanced high-bandwidth memory offerings for calendar year 2026.

Micron recently announced that it would be exiting its consumer chip business to focus on serving its AI customers.

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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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