Lululemon earnings, Meta's new VR headset: Top stories

Among the top stories from Thursday: Lululemon's first quarter results topped analyst estimates, sending shares soaring after-hours. Meanwhile, Meta has unveiled its latest VR headset. The Quest 3 will be available this fall and will cost $499. Finally, some dating app users are doing something different to attract dates: posting their credit scores. The Yahoo Finance Live team debates whether or not it's a good idea.

Video transcript

SEANA SMITH: Let's take a look at some of the top trending stories of the day. Alexandra Canal, Josh Schafer joining us here at the table to break it all down. We've got to start with Meta here announcing Quest 3, its new VR headset just days before Apple is set to announce something similar here. Lots of questions about whether or not this is actually going to be a hit here among consumers. It's going to cost $499.99. Let's call it 500 bucks. Zuckerberg hands the most powerful headset yet.

Allie, the huge issue, though, is that people haven't wanted to buy what Meta has before when it comes to VR headsets. I don't know if this is going to do the trick.

ALEXANDRA CANAL: Yeah. And the price point to me, 500 bucks for a headset, that feels like a lot, especially since we've seen virtual reality, mixed reality, the buzz surrounding that really fade over the last few years. And I could argue too, post-pandemic, everyone was secluded for so long. The last thing I want to do is put on a headset and enter another universe. I just want to be present in my own universe right now.

I am curious though, how this could stack up to Apple's rumored headset. We're supposed to get more details of that next week at Apple's worldwide developer conference. So maybe these tech giants know something we don't. But I agree with you, Seana. I just don't see it making a big splash.

JOSH SCHAFER: I'm curious what that $500 price tag looks like in a week, right, because there were rumors that Apple's headset could be $1,000, maybe more than $1,000. So there is in some world where maybe you start to think the Meta headset is actually cheaper. But I think overall when you think about Meta, it's interesting just to think about what they've done with Reality Labs in terms of revenue and how that revenue has come down significantly, right?

When you go back to thinking about the Quest and what the Quest 2 and Quest 1 were back a year or two ago, it was a popular Christmas gift. They had a lot of success with that headset in the younger demographic a couple of years ago. I'm curious if maybe come around to the end of this year if they can get that sort of buzzing impress. I don't know if it's going to be the 12-year-old popular Christmas gift. If we're talking consumer slowdown, is it going to be a $500 headset? Maybe not.

PRAS SUBRAMANIAN: For a standalone VR headset, a brand new over 499 is actually a pretty good deal, given how much they used to cost before. And it had to be attached to a massive, you know, high throughput computer. So this actually might be an OK deal for people that are in that world. And, like you mentioned, stealing Apple's thunder ahead of their big event, WWDC, where they might actually unveil $1,500.

ALEXANDRA CANAL: I'm thinking of like the week, right?

PRAS SUBRAMANIAN: Yeah, I know. But I-- like what you said, who uses these things and who's going to pay that kind of money for one?

SEANA SMITH: Yeah. And I also think that this is very smart for Meta to debut it right ahead of Apple because there's lots of hype. If, in fact, Apple does come through and actually announce its own headset, I think if someone could make something like this catch on with consumers, it's going to be Apple. So maybe it goes along with that saying, what is it rising tide lifts all boats. They could both potentially succeed if Apple is able to impress. But I don't know. I think a lot of it is riding on the tech giant.

JOSH SCHAFER: To be decided if those sell, right? But one thing that's definitely selling, women still selling clothes guys. Let's take a look at those shares trading up after hours, after the retailer just reported first quarter earnings. Taking a look at those numbers, first quarter revenue coming in at $2 billion. That's higher than the estimate for $1.93 billion. Adjusted EPS coming in at $2.28. That's versus Wall Street estimates of $1.97.

And then when you take a look at really why shares I think are popping so much here, Lululemon in a questionable consumer environment, upping their full year revenue guidance, which we have not seen from a lot of retailers this quarter. So Lulu now expecting revenue in range of 9.44 billion to 9.51 billion.

They have been expecting 9.3 to 9.41. And Seana, I think that's the biggest takeaway with Lulu right now is just the consumer is not slowing down spending at their store, which is something we've seen at other retailers.

SEANA SMITH: Yeah, exactly. And I think that's a great point to make. Lululemon, the stock hasn't exactly done too well since the start of the year. It's actually negative. What is it? Up just around 2 and 1/2 per cent comparing that to the 9% gain, 10% gain that we've seen in the S&P so far this year. So clearly, it's been a laggard since January 1st.

But it's amazing to me that so many consumers are still out there spending in this environment, spending 100, $120, even more on that. In some cases when it comes to leggings, but some of their sweatshirts costs like almost 200 bucks these days.

So certainly, is a very, very expensive product. And given the fact that we talk about that the consumer has been so resilient, you've got to ask yourself that is going to change in the second half of the year when we are bracing for what could be maybe a bigger slowdown.

PRAS SUBRAMANIAN: I just got to say what a quarter. I mean, slam dunk. I mean, look at this, beating on Q2 guidance, lifting full year revenue and profit targets, even giving revenue targets of 2026. Did you see that? I mean, 2026. So I mean, Lulu is still a desired brand. I mean, it's up 10% this week.

SEANA SMITH: I want to know about the belt bag, if that's still cool. I have a huge driver for that.

ALEXANDRA CANAL: I'm a big fan of Lulu. And we've repeatedly talked about the strength of the high end consumer, the strength of the luxury consumer. I don't know if you would say Lulu's a luxury brand. But I think compared to some of its competitors, it certainly is. And I know Josh when I were talking about what is Lulu's identity right now? It's not totally workout. It's not totally athleisure. It's sort of a mix of everything. And maybe that's what consumers want right now.

JOSH SCHAFER: Because broadly, you've seen athleisure actually been a laggard in terms of overall retail sales. And some of those companies themselves have actually struggled, right? When you look at D2C sort of Under Armor struggled, right? We haven't heard from Nike recently, but curious what they're doing in that D2C range. But that's where Lulu has really excelled. And I think it's the expansion beyond athleisure. It's athleisure that I'm wearing right now, right?

SEANA SMITH: But it's also in the same kind of price category as Anthropologie. We just heard from Urban Outfitters last week. Anthropologie was a massive standout in that quarter. Their sales up by double digits here. So certainly it sounds like that price point is at least still resonating here with consumers. Consumers are still willing to pay up for some of those items. But you got to wonder if that's going [INAUDIBLE].

PRAS SUBRAMANIAN: A quick question for you guys is, is Alo the brand more desirable than Lulu, right?

SEANA SMITH: That was the case of a "Journal" article over the weekend, wasn't it? Just in terms of the competition that they are facing from Alo.

JOSH SCHAFER: And the argument from the "Journal," Pras, was essentially that Alo is now the yoga brand that Lululemon once was. And Lulu has sort of superseded itself as a yoga brand and is now more a lifestyle brand, which I think looking at their results, maybe you'd rather be a lifestyle brand than a yoga brand.

ALEXANDRA CANAL: And I'm going to throw Abercrombie in on that because they have really good workout outfits, so I--

SEANA SMITH: You're still selling it. You're still--

ALEXANDRA CANAL: I'm still selling it. I've said it several times on this panel.

SEANA SMITH: And that's a cheaper price point, isn't it?

ALEXANDRA CANAL: Cheaper price point. So that's what I'm saying. And as I'm sure many of us a good outfit, whether it's from Lulu or elsewhere, that can often land you a first date. But what about a good credit score? That is something that apparently this young, hot, single kids are doing these days.

Hinge, which is owned by Match Group, a very popular dating app. They are actually putting their credit scores on their prompts. And that is leading to more first dates and better first dates. So they say. And I'm curious to get your thoughts. Are you in or out on putting your credit score on your dating profile, if it's good?

JOSH SCHAFER: I mean, I think--

SEANA SMITH: I'm in.

JOSH SCHAFER: You're in?

SEANA SMITH: I think it's a great idea. I think that financial issues obviously come up a lot when you're in a relationship, especially in a marriage. I think it's very important to get on the same wavelength. And it's very important to be transparent when it does come to your financials. I actually don't see a downside to this. I know I might be in the minority. But I do think it could be a good idea.

JOSH SCHAFER: I think at some point, how much information do you need on someone before you just have a drink or dinner with them, it gets to be like maybe too much information. And we're kind of just judging people from afar at some point when you have too much data, I think.

I did a little market research. I surveyed my mid-20s friends. And they said if other people have it, they would feel comfortable having it. That was the general consensus. Was if it's almost app required and every one's doing it, then they would do it. But they said, in that mid-20s range, they're not necessarily that worried about it yet. Perhaps there's time for the partner to get their credit score up.

ALEXANDRA CANAL: And I think the older you are, the more important this becomes. It seems like this is more so a good conversation starter, and particularly among women who put their credit score on it. Apparently, it shows guys that they're more independent, that they are strong, financially savvy. So I don't know. Pras, what, you're making a face.

PRAS SUBRAMANIAN: I think it's a little tacky to have your credit score on your dating profile.

SEANA SMITH: Have you seen what people put on their dating profiles? A lot of them are already putting that.

PRAS SUBRAMANIAN: I know. I know. But you want a little bit of romance, not so much like what's my Experian algo score for my you know, my credit score here. So I don't know. If people these days like that, I mean, Josh, your friends or my thing is a little mid, right? Bad for the rizz.

SEANA SMITH: Josh, would you? Let's turn it on you.

PRAS SUBRAMANIAN: Bad for the rizz.

SEANA SMITH: You're in your mid-20s, single guy, would you put your credit score on a dating app?

JOSH SCHAFER: I feel comfortable with my credit score. Yes. If that's the question, I would put it on a dating app.

ALEXANDRA CANAL: There we go.

SEANA SMITH: How are you going to put it on there?

PRAS SUBRAMANIAN: OK, I was wrong.

SEANA SMITH: All right, we'll leave it there, but we'll see. I actually think it's a good idea. You got to be transparent about these things.