UPDATE: D.A. Davidson Lowers PT on Lululemon Athletica Following Strong 2Q EPS Report

In a report published Friday, D.A. Davidson analyst Andrew Burns reiterated a Neutral rating on Lululemon Athletica LULU, but lowered the price target from $76.00 to $73.00. In the report, D.A. Davidson noted, “LULU reported constant currency comps, revenue and EPS of 8%, $344.5 million and $0.39. This compares to consensus revenue and earnings of $343.9 million and $0.35 and our estimates of $344.1 million and $0.35. 2Q guidance called for comps of 5%-7%, revenue of $340-$345 million, and EPS of $0.33-$0.35. Store revenue climbed 18% year-over-year (y/y), Direct-to-consumer increased 39%, and Other revenue was up 34%. Gross margin decreased 113bp y/y to 54.0% largely due to the lower mix of black luon pants and a higher inventory reserve. SG&A grew 25% to $107.0 million, deleveraging ~70bp to 31% of sales.” Lululemon Athletica closed on Thursday at $65.29.