Jefferies Remains Extremely Bearish on Underperform Rated Lululemon (LULU), Prices Equity Nearly 50pct Below Spot

Jefferies analyst Randal Konik reiterated an Underperform rating and $200.00 price target on Lululemon Athletica Inc. (NASDAQ: LULU).

The analyst comments "Inventory Levels Remain Elevated, Increasing Markdown Risk Ahead... LULU's inventory levels increased ~85% YoY in 2Q, up from ~74% in 1Q and ~49% in 4Q. With LULU's inventory levels remaining elevated and mgmt noting inventory growth in 3Q is likely to outpace that of 2Q, we believe LULU will likely have to increase markdowns, as the consumer continues to be impacted by the current inflationary environment. We Continue to View LULU's International and Men's Outlook as Aggressive. LULU's men's business has witnessed YoY growth trends decline sequentially for five consecutive quarters, and we believe it will be a tall task to double the men's business in five years. As it relates to its international outlook, LULU has very low unaided brand awareness internationally, and we believe ongoing inflationary and FX pressures could present additional headwinds."

For an analyst ratings summary and ratings history on Lululemon Athletica Inc. click here. For more ratings news on Lululemon Athletica Inc. click here.

Shares of Lululemon Athletica Inc. closed at $385.99 yesterday.

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