Jefferies Sees Potential For Conservative Guidance from Lululemon (LULU)

Analysts at Jefferies had some cautious commentary on Lululemon Athletica Inc. (NASDAQ: LULU) Tuesday ahead of Q4 results on March 22nd.

The analyst said while Q4 itself will be a non-event given the January ICR pre announcement, "we could see a near-term hiccup if management guides FY12
conservatively and decelerates the rate of store growth." However, even if 2012 guidance is conservative, the firm expects any pullback to be "brief and shallow."

Jefferies also expects store growht to decelerate. They are modeling LULU to open 36 new stores in FY12, comparable to the 37 new stores in FY11. "We have no qualms about slower store growth given management's philosophy towards scaling/leveraging e-commerce (higher margin, less capital intensive, higher
return)," the analyst comments. "That said, skeptics (once us, but no longer) could interpret decelerating square footage growth as a negative signal for a growth company trading at 45 P/E.."

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 $73.05 yesterday.

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