Recently, Zacks.com users have been paying close attention to Lululemon (LULU). This makes it worthwhile to examine what the stock has in store.
I upgrade lululemon to a "buy" as the company sees stabilization in the US market while sustaining momentum in its international markets through robust product innovation and superior guest experience. Despite a 32% stock decline since my last writing, lululemon's Q4 earnings beat estimates, showing strong revenue growth and margin expansion, particularly in international markets. While Tariff-related headwinds and rising inventory pose risks, with the management predicting a slowdown in FY25, easing trade tensions could offer potential upside.
Lululemon (LULU) reachead $265.76 at the closing of the latest trading day, reflecting a +1.55% change compared to its last close.
Lululemon's (LULU 3.02%) international supply chain could become a liability amid rising tariffs.
Randy Konik, Jefferies, joins 'Fast Money' to talk Lululemon losing out in a key market.
Big western fashion brands, including Lululemon Athletica Inc (NASDAQ:LULU) and French giants Louis Vuitton Moet Hennessy (EPA:MC) and Hermès International, are being targeted by Chinese manufacturers using TikTok to claim they can make much cheaper knockoffs using the same production lines. Videos on Tiktok claim to be selling $5 yoga leggins from Lululemon's own production lines, in one example.
Lululemon (LULU) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
As new trade tariffs get rolled out by President Trump with the United States' main trading partners, some sectors of the stock market are going to get hit harder than others due to the very nature of where these tariffs are focused. Not only the countries that they are targeting but also the products, which are focused on agriculture, and also all the materials that affect prices and costs for the retail sector.
The latest trading day saw Lululemon (LULU) settling at $261.03, representing a +1.72% change from its previous close.
During the five years leading up to their all-time high in December 2023, shares of this well-known, consumer-facing enterprise were up an astonishing 321%. That gain easily crushed what the broader S&P 500 produced during the same time.
Lululemon's (LULU 0.47%) year-over-year results are slowing down a bit, and conservative guidance based on slower spending expectations for the consumer make the pullback in the stock seem justified. Lululemon has been a gem at times for investors, but the uncertainty over the market now makes it seem like a tricky stock to navigate.
Investors willing to look around can still find potential opportunities. Even the share prices of generally high-quality businesses can take a hit due to a variety of factors.