Lululemon Athletica's Q4 Previews Offered At Deutsche Bank, Mizuho, Topeka

Lululemon Athletica inc. LULU is scheduled to report its fourth quarter results on Thursday before market open. Analysts are expecting the company to earn $0.73 per share on revenue of $598.82 million.

Deutsche Bank: Remain Sidelined

In a report published Tuesday, Deutsche Bank analyst Dave Weiner commented that he is "uncomfortable" with the set-up of Lululemon's stock, given uncertainty over 1) the sustainability of needed mid-single digit comps, 2) a "modestly more volatile" promotional cadence versus prior years and 3) OM trajectory ahead of another investment year. "That said, we realize that outsized focus on Thursday likely remains on NA comps, which in our view will influence the near-term glide-path of the stock," Weiner wrote. "This is offset in limited degree, we believe, by potential comments about FX, recent unseasonable weather, and West coast port issue P&L impacts." Weiner is projecting the company will earn $0.73 per share on revenue of $600 million based on +7 percent comp store sales.

Mizuho: Mixed Risk To Reward Setup Ahead Of Print

In a report published Tuesday, Mizuho Bank analyst Betty Chen suggested that Lululemon's risk to reward profile is "mixed" while investor focus will be on comp acceleration, pace of international store rollout and SG&A investments to facilitate eCommerce and global expansion. "Investors may view foreign exchange headwinds and West Coast port disruptions as transient in nature and focus on the underlying fundamentals," Chen wrote. "That said, we believe the magnitude of fiscal 2015 operating deleverage may surprise while as we continue to question Lululemon's long-term margin profile with the shift towards lower-margin product categories as rationale for our Neutral stance." Chen is projecting the company will earn $0.73 per share on revenue of $602.7 million based on comps of + six to seven percent. Shares remain Neutral rated with a $58 price target.

Topeka: Lululemon ‘Powering Up' In 215

In a report published Wednesday, Topeka Capital Markets analyst Dorothy Lakner stated that shares of Lululemon have "moved nice" this year on news of better holiday sales and continued momentum seen in the third quarter. "That said, we do not share the belief that Lululemon is ahead of itself, especially considering its position as the premier brand in the hottest trend in apparel, one that still has plenty of legs and Lululemon's position as one of few growth companies in specialty retail," Lakner wrote. "As such, we believe Lululemon can see its multiple expand as we move through 2015 and look out to OM expansion beginning in 2016." Lakner didn't offer specific Q4 estimates. Shares are Buy rated with a $75 price target.
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Posted In: Analyst ColorAnalyst RatingsAthleisurewearBetty ChenDave WeinerDeutsche BankDorothy LaknerlululemonmizuhoretailersTopeka Capital Markets
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