This Lululemon Tracker Points To Good News Coming

On Thursday, Baird Research issued a report on Lululemon Athletica inc.

after recent analysis showed that fourth quarter results may be above January guidance issued by company management. Currently, Baird rates Lululemon as Outperform and raised their price target from $67 to $71. Mark Altschwager and Drew North, analysts at Baird Research, wrote, "LULU remains a favorite growth pick based on a healthy category backup, improved product innovation, and numerous margin tailwinds. We expect Q4 results at/above January guidance and see a path to 20 percent EPS growth in 2016...our checks/proprietary assortment tracker point to leaner inventory and fresher product-supporting our outlook for product margin improvement…" Analysts at Baird gave one key reason why they believe Lululemon will drive improvements in business operations and shareholder value in 2016. 1. Margin growth Baird noted that Lululemon can drive margin improvement based on improving customer demands, especially in their growing men's category of athletic wear. Analysts highlighted that reduced clearance sales in a majority of the company's stores can drive margin improvement on a continuing basis. Furthermore, analysts described how Lululemon can reduce inventory holding costs through improved inventory tracking methods and further increase profitability. Lululemon last traded at $61.00, up 1.55 percent.