Lululemon Athletica Inc must remain aggressive to stave off competitive threats from Nike, Under Armour and Gap`s Athleta brand

Lululemon Athletica`s stock price was very low in 2009, trading at only $2,25 in March. That was the bottom, and the stock followed all other stocks on the way up. Belive it or not, but Lululemon Athletica is trading at about $68 right now. What a ride.

Lululemon Athletica Inc is a designer, distributor and retailer of technical athletic apparel. The company offers a line of apparel and accessories for women, men and female youth. Its apparel assortment includes items, such as pants, shorts, tops and jackets designed for healthy lifestyle activities and athletic pursuits, such as yoga, running, other sweaty pursuits and athletic wear for female youth.

 

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Athleisure continues to be one of the fastest growing segments throughout the apparel industry, with retail otherwise hitting some major roadblocks this quarter. Many trace this trend directly to Lululemon.

Despite a strong holiday quarter, with results even surpassing raised corporate guidance, expectations for Q1 are muted as competitors with lower price points begin to steal market share.

This part quarter was highlighted by a 17% increase in revenue supported by growth in key channels including comp store sales and directs to consumer revenue. Lululemon remains focused on undertaking new investments and initiatives to strengthen its position in the burgeoning athleisure space.

In particular, the revamped women’s leggings segment and the introduction of men`s clothing has accelerated same store sales and improved margins.

Lululemon remains well positioned to sustain its high income core customers but must remain aggressive to stave off competitive threats from Nike, Under Armour and Gap`s Athleta brand. As consumers become more value-focused, LULU is losing out to those with lower price-points, although their core remains very loyal.

The Estimize calls for EPS of $0,31, wich is one cent above Wall Street. Revenue expectations from Estimize are also slightly higher at $488,6 million as compared to the Street`s $487,55 million. Earnings estimates have decreased by 11% over last three months, now expected to show a YoY decline of 6%.

Revenues estimates have remained flat during that time, and are still projected to show 15% YoY growth for the quarter.

Watch out for reports on June 8, 2016, before the open.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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