Oppenheimer: Lululemon 'Expectations Already Re-Set'

In a report published Tuesday, Oppenheimer analyst Anna Andreeva maintained an Outperform rating on

and a price target of $70. Lululemon's share price has declined by 12 percent from its April highs on concerns over the company's fundamentals and expectations of a sales miss in 1Q15. "Based on our recent checks, tweaking down 1Q15 sales (still seeing what we believe are port delay issues linger into 2Q15) while maintaining EPS; expectations on the stock becoming re-set ahead of 6/9 EPS," analyst Anna Andreeva mentioned. The company's long term prospects remain bright with easy comparisons over the next two quarters, additional share opportunity with moderation at competitor Athleta and the strength of the athletic cycle. In the report Oppenheimer noted, "March likely in line with LSD guidance (LULU reported 3/26 and typically guides based on current trend) with solid Easter weekend; April likely weaker, similar to industry (Easter shift, ports)." Recent improvement in flows and positive May comments from most retailers indicate that the 2Q15 expectations are reasonable. "The company historically earns more in 2Q than in 1Q," Andreeva pointed out. "We like LULU's risk/return given rare sq footage/top-line growth story in strong athletic category with earnings growth accelerating starting '16," the report added.