Lack of N-T Catalysts for lululemon (LULU) Keeps Janney Sidelined into Q4 Print

Janney Capital is commenting on lululemon athletica, inc. (Nasdaq: LULU) ahead of the company's Q4 report, which is expected out before markets open on March 26th.

Analyst Adrienne Tennant noted that the firm is maintaining its estimates into the tape. The analyst is looking for Q4 EPS of $.71 and revenue of $516.8 million and FY13 EPS of $1.87 and revs of $1.59 billion.

Tennart commented, We expect the company to provide conservative 1Q14 EPS guidance with the potential for downside ... We look for greater differentiation of product as the year progresses but we note, thus far this spring, there is still not enough depth of “special product” in our opinion. Based on our checks for early spring, we believe too much of the customer “choice count” is in multiple colors of core products, rather than multiple style offerings.

Key points keeping Tennart sidelined for now:

1. longer-time to recover from Luon and other PR-related issues;
   
   
2. potential for negative store-level comps (and associate deleverage and margin pressure) over the next few quarters (we do note that we fully expect management to switch to reporting comps including direct-to-consumer (“DTC”) in 2014;
   
   
3. ongoing potential for downward earnings revisions (we are roughly 10% below consensus); and
   
   
4. increasing competitive threats from new entrants, in particular well-capitalized Athleta (a division of GPS).

The firm as lululemon at Neutral with a fair value estimate of $49.

For an analyst ratings summary and ratings history on lululemon, click here. For more ratings news on the company, click here.

Lululemon athletica closed at $49.32 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Midday movers: Tesla, Blackstone, Las Vegas Sands fall; DR Horton rises
• Google (GOOGL) Makes Structural Changes to AI Teams to Quicken Progress: CEO
• Intelligent Bio Solutions (INBS) Reports Prelim Q3 Results