Lululemon (LULU) Stock | Stretching For Highs


Lululemon Athletica Inc. (NASDAQ: LULU)

The well known yoga attire giant, Lululemon is surging higher today after the company reported  first quarter earnings that just slightly beat analysts’ forecasts. Shares of LULU traded higher by over $5.80 near $67.50 on high relative volume.

LULU Earnings & Outlook

LULU reported a 10% boost to $423.5 million from $384.6 million a year ago. The comparable sales also experienced a jump of 6% with those gains stemming from the significant jump in online sales of 31% for the first quarter of 2015.

Looking forward, LULU is expecting revenue for the second quarter to land between $440-$445 million while anticipating earnings per share to fall between 31-33 cents, just below the consensus of 34 cents.

Lululemon Athletica’s CEO Comments

LULU’s CEO, Laurent Potdevin said, “To support our long-term goals, we are intentionally striking a strategic balance between strong growth and investments within innovation and infrastructure. Our team’s solid performance resulted in another improving quarter – coming in ahead of our revenue expectations.”

Product Line Overhaul

LULU recently overhauled its product line after experiencing the multiple issues with the yoga pants being too sheer. LULU’s reputation suffered as well as their bottom line after they attempted to address the issue by recalling millions and millions of dollars worth of product. After the recall, LULU struggled to come up with a solution to correct the design flaw a, which only fueled the hysteria in the market place. LULU eventually improved the quality of  its products as well as added more fashionable patterns popular among customers.

Technical Analysis

Since the beginning of 2015  until April, LULU has traded in somewhat of a narrow range between $60 and $68. In April, LULU spiked to $70, breaking out of the consolidation movement it had experienced the prior few months. However, after pegging $70 exactly and a false break setup, LULU turned lower and remained on a downtrend until the present. As of late, shares of LULU have broken back above the 9, 20, and 50 day moving averages and looks to be setting up for a significant move back higher if the company can sustain its rapid growth, beating the street the last 8 consecutive quarters.


Company Profile

lululemon athletica inc., together with its subsidiaries, designs, manufactures, and distributes athletic apparel and accessories for women, men, and female youth. It operates through two segments, Corporate-Owned Stores and Direct To Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle activities and athletic pursuits, such as yoga, running, and general fitness; and dance-inspired apparel for female youth. It also provides fitness-related accessories, including bags, socks, underwear, yoga mats, and water bottles. The company sells its products through a chain of corporate-owned and operated retail stores; a network of wholesale channel, such as yoga studios, health clubs, and fitness centers; and outlets and warehouse sales, as well as directly to consumer through and e-commerce sites, and showrooms. Yahoo! Finance