D.A. Davidson: Lululemon's Q3 Results, Outlook Proof Of 'Continued Progress'

Andrew Burns of D.A. Davidson commented in a note on Friday that

third quarter results and outlook should be viewed as “continued progress.” “While the revenue and gross margin performance was below our expectation, this was primarily due to the CAD deprecation late in the quarter,” Burns wrote. “The topline currency translation impact was mostly offset by lower SG&A, which reduced expenses $3.4 million.” Burns does note that the upside seen in the third quarter print is offset by a reduced fourth quarter expectation. However, the analyst does see Lululemon retaining its position as a premium athletic brand despite an increasingly competitive environment space. Burns does caution investors that Lululemon's current valuation “adequately” reflects its global growth potential and shares were reiterated with a Neutral rating with a price target raised to $56 from a previous $47.