Market Overview

Lululemon Has Long-Term Potential To 'Nearly Triple Revenue,' Bullish Analyst Says Ahead Of Q3 Print

Lululemon Has Long-Term Potential To 'Nearly Triple Revenue,' Bullish Analyst Says Ahead Of Q3 Print

William Blair said it expects Lululemon Athletica inc. (NASDAQ: LULU) to meet or slightly beat its EPS estimates for the yoga apparel maker when it reports third-quarter results Dec. 5. 

The Analyst

William Blair analyst Sharon Zackfia maintains an Outperform rating on Lululemon. 

The Thesis

Heading into the Q3 print, Zackfia said Lululemon’s exceptionally strong sales trends should continue given its decent execution and strong flow of new products, including a 20th anniversary collection. (See her track record here.) 

While shares have dropped roughly 25 percent with the broader market slump and the opportunity for upside has lessened due to aggressive Wall Street expectations, William Blair continues to see the potential for earnings growth.

“We continue to see the potential for sustainable 15-20-percent annual EPS growth given Lululemon’s enviable competitive position composed of highly productive stores, aspirational proprietary product, a healthy e-commerce channel and the potential to ultimately nearly triple revenue as the concept continues to expand around the globe," the analyst said. 

William Blair projects a 14-15-percent comp gain driven by mid- to high-single digit gains in brick-and-mortar and a roughly 40-percent increase in e-commerce sales.  

Fewer in-store markdowns than a year-ago are also a promising sign for the athletic apparel company, Zackfia said. 

“Overall, we project sales growth of 19 percent to $735 million, in-line with consensus and above guidance of $720 million to $730 million." 

New CEO Calvin McDonald is expected strengthen the brand in the years ahead, the analyst said, adding that a loyalty plan is a likely initiative from the new C-suite occupant. 

Price Action

Lululemon shares were down 0.78 percent at $122.80 at the time of publication Tuesday.

Related Links:

Howard Lindzon: Nike, Lululemon, Apple Lead In 'Fashology'

Rhone Looks To Pioneer An Underserved Premium Mens Activewear Category

Photo by GoToVan/Wikimedia. 

Latest Ratings for LULU

Jan 2021Morgan StanleyMaintainsEqual-Weight
Dec 2020Morgan StanleyMaintainsEqual-Weight
Dec 2020Raymond JamesMaintainsStrong Buy

View More Analyst Ratings for LULU
View the Latest Analyst Ratings


Related Articles (LULU)

View Comments and Join the Discussion!

Posted-In: Sharon Zackfia William BlairAnalyst Color Earnings Previews Reiteration Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

VVNTMorgan StanleyMaintains23.0
VRSKMorgan StanleyMaintains216.0
UNMMorgan StanleyMaintains26.0
UEMorgan StanleyMaintains13.5
SUMMorgan StanleyMaintains29.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at