Market Overview

Lululemon Swings Between Gains and Losses Following Earnings Report

Shares of Lululemon Athletica (NASDAQ: LULU) traded wildly on Thursday, gaping up over four percent at the open before trading into the red. Going into the second hour of trading, shares had regained some momentum and were up about two percent.

Lululemon is a clothing retailer known for its yoga gear. The company reported a third quarter earnings per share figure of $0.39, more than the $0.37 that was anticipated. Revenue came in at $316.5 million, more than the $305.15 million that analysts were looking for.

Lululemon also forecast greater than expected earnings and revenue numbers for the full fiscal year, although it guided the fourth quarter lower. The company said fiscal year 2012 earnings would come in between $1.81-1.83, while sales would fall between $1.36-1.37 billion. Previously, the company had expected fiscal year 2012 EPS of $1.76-1.81 on revenue of $1.35-1.36 billion.

NBG analyst Brain Sozzi commented, "The quarter should support the case of the bulls. Same-store sales above guidance and a nice improvement in gross margin basis point change relative to the second quarter."

Over the last few years, Lululemon has been active growth stock. Despite a large selloff in the middle of the year, shares of Lululemon are up about 50 percent year-to-date. The stock is somewhat of a high flyer with a forward PE near 31, as investors bet on the growing fitness trend of yoga to propel future sales.

This momentum status has attracted short sellers. The stock has a short float ratio above 20 percent.

There has been chatter that noted hedge fund manager and short seller David Einhorn could be involved in shorting the company, although Lululemon's CEO told CNBC on Thursday that Einhorn has not engaged management. Early in October, Einhorn targeted Chipotle (NYSE: CMG), a company with similar high flying status.

Shares of Lululemon traded near $69.60 on Thursday.

Posted-In: Analyst Color Earnings News Guidance Intraday Update Analyst Ratings Movers Trading Ideas Best of Benzinga

 

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