"Lululemon Athletica Got Her Groove Back," Says Nomura

In a report published Tuesday, Nomura analyst Robert Drbul commented that he remains comfortable with his fourth quarter estimates for Lululemon Athletica, Inc. LULU Drbul is projecting Lululemon to earn $0.73 when it reports its fourth quarter results on March 19 before market open. The analyst noted that the company may see a 150 basis points of gross margin contraction in the fourth quarter due to mix, product and supply chain expenses along with store occupancy and depreciation. Drbul expanded that the Holiday period marked an "important inflection point" for the company and that its efforts to accelerate global expansion are "off to a strong start." For the full fiscal year 2014, the analyst is projecting the company will earn $1.82 per share. Looking forward to the full year fiscal 2015, Drbul is projecting the company will earn $2.10 per share ( $0.02 above the consensus estimate), driven by a return to high-single-digit blended comps. Shares are Buy rated with a $70 price target.