Lululemon (NASDAQ:LULU) releases its second-quarter results this afternoon after the close. It will be the first LULU earnings report for new CEO Calvin McDonald, who has been in the top job for just a week. Can he deliver for LULU stock?  

If you recall, McDonald was hired away from Sephora in late July, where the 46-year-old was the cosmetics retailer’s CEO for the Americas.

At the time, I called the move “brilliant,” suggesting the long-time retail executive would bring stability to a corporate culture that took a big hit from former CEO Laurent Potdevin’s insistence on maintaining a boy’s club rather than a business.

The man’s a total pro. I recommend investors listen in on his first conference call Thursday to get a picture of what makes the man tick.

McDonald recently contributed an article to LinkedIn entitled First Impressions and Fresh Starts, which details his plans for the first 100 days at Lululemon.

“My advice to leaders is to be curious, to ask lots of questions, and to learn about the business, culture and people. As counter-intuitive as it may be in certain situations, take the time to listen and learn as opposed to acting in the moment,” McDonald wrote Aug. 23. “Again, the idea is to over index on listening, and under index on decision making, to successfully immerse yourself into the new team or organization that you are lucky enough to lead forward.”

Notice the emphasis on listening. Smart leaders listen more and talk less. From this perspective, LULU shareholders ought to be excited.

LULU Earnings: What Are the Numbers Going to Be?

The 33 analysts covering Lululemon stock have an earnings estimate of $0.49-per-share in the second quarter, which is 26% higher than in the same quarter a year earlier. The earnings whisper number is 4 cents higher at 53 cents.

On the top line, the consensus estimate for the quarter is $666 million, which is 15% higher than a year earlier and in line with the growth estimate of 17% for the entire year.

InvestorPlace’s Vince Martin recently suggested investors move cautiously before earnings because it has a much higher same-store sales comparison this quarter than it did in the previous quarter.

“This time around, Lululemon is comparing against 7% same-store sales growth, a figure boosted by an online sale. On the bottom line, the compare remains soft: EPS actually declined year-over-year in Q2 FY17,” Martin wrote Aug. 27. “It’s not hard, however, to imagine a narrative in which Lululemon beats on earnings — but weaker-than-expected comps bring the stock down.

I think that’s a fair hypothesis regarding LULU stock. However, it cuts both ways.

If LULU comes anywhere close to or exceeds the 20% same-store sales growth in the first quarter, the “buy” signal absolutely gets lit up. 

Where Does Lululemon Stock Go From Here?

I’m a fan of Lululemon’s business, in part, because it continues to be one of Canada’s great export stories. I’m also impressed by the fact that long-time employees have managed to keep the ship pointed in the right direction despite a couple of dysfunctional CEOs in its history.

That’s not easy to do … something Logan Capital Management principal and portfolio manager Stephen Lee commented on in our recent conversation about Lululemon stock.

Lee helps manage some large-cap growth and mid-to-large cap growth portfolios for Logan, including its Global Growth strategy, which has LULU stock in its top ten holdings; I spoke to him about what to expect from LULU’s earnings today.

Although we didn’t get into specific numbers, the portfolio manager did paint a picture of success.

“The stores are busy, consumer apparel brands, in general, are doing well, so it seems likely that Lululemon will deliver a good [Q2 2018] earnings report,” Lee told me. “I’ll be looking to see if Lululemon took market share during the quarter, how its men’s line is progressing, and if the e-commerce business is continuing to see strong numbers.”

Generally, Lee wants to know that the company is continuing to innovate and grow; beyond that, he’s willing to accept a little volatility from one earnings report to the next.

Lee and the rest of his team at Logan are also bullish on Calvin McDonald’s hiring, but will reserve final judgment on Lululemon’s stock until they’ve learned more about the CEO’s plans.

The Bottom Line on LULU Stock

Don’t forget to listen to this afternoon’s conference call or get a copy of the transcript. It will be very instructive for Lululemon stock investors trying to get a feel for McDonald’s tone and style.

Barring some shockingly poor earnings report, which doesn’t seem likely given how well many of the higher-end brands have done in the latest round of earnings — Tiffany’s (NYSE:TIF) earnings were excellent — it appears it will be business as usual for LULU stock post-earnings.

And that’s a very good thing.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.