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Analysts Cheer Lululemon's Impressive Growth, Innovation Is Still Key

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Analysts Cheer Lululemon's Impressive Growth, Innovation Is Still Key

Lululemon Athletica Inc. (NASDAQ: LULU) shares traded higher on Friday after the company knocked it out of the park with its second-quarter earnings report.

Lululemon reported earnings and revenue above analyst forecasts and said same-store sales growth was up 15% last quarter, beating consensus expectations of 12.2% growth.

Several analysts have weighed in on Lululemon's stock following the report. Here’s a sampling of what they’ve had to say.

Impressive Growth

Morgan Stanley analyst Kimberly Greenberger said Lululemon came through with more impressive guidance numbers.

“LULU’s revised FY guidance and strength across sales channels, regions, and categories suggest that the growth story is in full execution mode,” Greenberger wrote in a note.

See Also: Analysts: Athletic Brands Aren't Making Enough Products For Women

Bank of America analyst Rafe Jadrosich said same-store sales growth acceleration is even more impressive given tougher comps.

“We still see additional operating margin opportunity longer term from favorable channel mix & improving international scale,” Jadrosich wrote.

Innovation Is Key

KeyBanc analyst Edward Yruma said Lululemon’s superior products are driving impressive growth numbers.

“We believe that men’s presents a particularly compelling opportunity and remain impressed that the core women’s business continues to grow at +DD rates,” Yruma wrote.

MKM Partners analyst Roxanne Meyer told CNBC that Lululemon is differentiating its business from competitors via its unparalleled innovation.

“In their case, it’s not just updating new items, it’s actually in the fabric and new technology,” Meyer said.

Ratings And Price Targets

  • Morgan Stanley has an Equal-Weight rating and $169 target.
  • Bank of America has a Buy rating and $230 target.
  • KeyBanc has a Sector Weight rating and no target.
  • MKM has a Buy rating and $218 target.

Lululemon's stock traded higher by 6.6% to $200.74 per share at time of publication.

Latest Ratings for LULU

DateFirmActionFromTo
Jul 2020BTIGMaintainsBuy
Jul 2020BairdMaintainsOutperform
Jun 2020UBSMaintainsNeutral

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