We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
{\"0\":\"Weak growth has driven LULU shares lower. \",\"1\":\"International momentum remains strong. \",\"2\":\"Shares have lost nearly half their value over the last year. \"}
Lululemon Athletica Inc. (LULU - Free Report) designs, manufactures, and distributes athletic apparel and accessories for women, men, and female youth. Analysts have taken a bearish stance on the company’s earnings outlook, pushing it to a Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
The company also resides in the Zacks Apparel – Textile industry, which is currently ranked in the bottom 12% of all Zacks industries. Let‘s take a closer look at what’s been impacting the company.
Lulu Shares Plunge
LULU shares have been stuck in a deep bearish trend for some time now, down nearly 50% just over the last year. Quarterly results that have revealed slowing growth have been driving the plunge, with shares seeing negative post-earnings reactions following each of the last three releases.
Image Source: Zacks Investment Research
Notably, weakening demand in its Americas region has been a big thorn in the side of the company, with comparable store sales falling 4% year-over-year throughout the latest period. International momentum has remained, though, with those comparable sales soaring 15% year-over-year.
Calvin McDonald, CEO, acknowledged the performance disparity, stating –
"While we continued to see positive momentum overall in our international regions in the second quarter, we are disappointed with our U.S. business results and aspects of our product execution. We have closely assessed the drivers of our underperformance and are continuing to take the necessary actions to strengthen our merchandise mix and accelerate our business. We feel confident in the opportunity ahead and plans we have in place to drive long-term growth."
As shown below, the company’s sales growth rates were fantastic over recent years before tapering off, with the market not appreciating the growth cooldown. Please note that the chart below tracks the YoY % change in sales, not actual sales numbers.
Image Source: Zacks Investment Research
Bottom Line
Negative earnings estimate revisions, stemming from a challenging demand environment, paint a challenging picture for the company’s shares in the near term.
Lululemon Athletica (LULU - Free Report) is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.
For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bear of the Day: lululemon athletica (LULU)
Key Takeaways
Lululemon Athletica Inc. (LULU - Free Report) designs, manufactures, and distributes athletic apparel and accessories for women, men, and female youth. Analysts have taken a bearish stance on the company’s earnings outlook, pushing it to a Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
The company also resides in the Zacks Apparel – Textile industry, which is currently ranked in the bottom 12% of all Zacks industries. Let‘s take a closer look at what’s been impacting the company.
Lulu Shares Plunge
LULU shares have been stuck in a deep bearish trend for some time now, down nearly 50% just over the last year. Quarterly results that have revealed slowing growth have been driving the plunge, with shares seeing negative post-earnings reactions following each of the last three releases.
Image Source: Zacks Investment Research
Notably, weakening demand in its Americas region has been a big thorn in the side of the company, with comparable store sales falling 4% year-over-year throughout the latest period. International momentum has remained, though, with those comparable sales soaring 15% year-over-year.
Calvin McDonald, CEO, acknowledged the performance disparity, stating –
"While we continued to see positive momentum overall in our international regions in the second quarter, we are disappointed with our U.S. business results and aspects of our product execution. We have closely assessed the drivers of our underperformance and are continuing to take the necessary actions to strengthen our merchandise mix and accelerate our business. We feel confident in the opportunity ahead and plans we have in place to drive long-term growth."
As shown below, the company’s sales growth rates were fantastic over recent years before tapering off, with the market not appreciating the growth cooldown. Please note that the chart below tracks the YoY % change in sales, not actual sales numbers.
Image Source: Zacks Investment Research
Bottom Line
Negative earnings estimate revisions, stemming from a challenging demand environment, paint a challenging picture for the company’s shares in the near term.
Lululemon Athletica (LULU - Free Report) is a Zacks Rank #5 (Strong Sell), indicating that analysts have taken a bearish stance on the company’s earnings outlook.
For those seeking strong stocks, the best idea would be to focus on stocks with a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.