FBR Capital Maintains an 'Underperform' on Lululemon Athletica (LULU); Operational Concerns and Valuation
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Price: $360.00 -1.26%
Rating Summary:
32 Buy, 11 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
32 Buy, 11 Hold, 3 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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FBR Capital maintains an 'Underperform' on Lululemon Athletica Inc. (NASDAQ: LULU), PT $80.
FBR analyst says, "The quarter was good by almost any measure. Sales and gross margins beat expectations. Management firmly defended quality, saying there were no issues. We stand by what we have experienced and heard from other customers and online reviews. However, that particular concern was not validated on this conference call. Management says inventory is in better shape. The company is still running with inventories below the level sales demand and our sense is that factory capacity for technical apparel is tight. Also, Canada sales slowed dramatically in the quarter, growing year over year by 8.5% versus the 26.5% growth last quarter. The Canadian business is more mature and this does still suggest a positive comp. But it is one more concern added to our inventory and sourcing concerns. Taken together with a retail tape that continues to roll over, we see reason to stay negative on this high multiple stock for now."
"We are revising our 2Q11 EPS estimate to $0.43 from $0.42. CY11 EPS remains $2.12. CY12 EPS also remains $2.60."
For more ratings news on Lululemon Athletica Inc. click here and for the rating history of Lululemon Athletica Inc. click here.
Shares of Lululemon Athletica Inc. closed at $86.14 yesterday.
FBR analyst says, "The quarter was good by almost any measure. Sales and gross margins beat expectations. Management firmly defended quality, saying there were no issues. We stand by what we have experienced and heard from other customers and online reviews. However, that particular concern was not validated on this conference call. Management says inventory is in better shape. The company is still running with inventories below the level sales demand and our sense is that factory capacity for technical apparel is tight. Also, Canada sales slowed dramatically in the quarter, growing year over year by 8.5% versus the 26.5% growth last quarter. The Canadian business is more mature and this does still suggest a positive comp. But it is one more concern added to our inventory and sourcing concerns. Taken together with a retail tape that continues to roll over, we see reason to stay negative on this high multiple stock for now."
"We are revising our 2Q11 EPS estimate to $0.43 from $0.42. CY11 EPS remains $2.12. CY12 EPS also remains $2.60."
For more ratings news on Lululemon Athletica Inc. click here and for the rating history of Lululemon Athletica Inc. click here.
Shares of Lululemon Athletica Inc. closed at $86.14 yesterday.
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