Lululemon Athletica (LULU) shares tumbled to their lowest level since the spring of 2020 as analysts raised concerns about the fashion athletic wear maker's financial performance in a slowing retail environment.
The activewear retailer is pulling its newest Breezethrough leggings in response to mixed customer feedback.
Citi sees building competitive and execution challenges for Lululemon, whose stock ranks among the S&P 500's worst performers this year
Athletic apparel retailer Lululemon Athletica Inc (NASDAQ:LULU) is down 3.1% before the bell, following a barrage of bear notes.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Recently, Zacks.com users have been paying close attention to Lululemon (LULU). This makes it worthwhile to examine what the stock has in store.
Lululemon is in a 40% drawdown because of slowing North American sales. International sales are booming and can help revenue growth over the next five to 10 years.
A strong brand helps Lululemon generate outsized profit margins. Management sees huge growth potential, particularly in China.
Nike shares are down 60% from their previous peak as the company loses sales momentum in the wake of weak consumer spending trends. Shopify, Lululemon, and emerging shoe brand On Holding are all still posting double-digit sales growth.
Slowing sales might be the key reason investors are souring on this business. The competitive nature of the industry is hard to ignore, making it difficult to find lasting success.
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Lululemon Athletica Inc. is a buy at $291 per share due to strong brand loyalty, international growth potential, and rock-bottom valuations. Concerns over growth slowdown, consumer weakness, and geopolitical risks have contributed to -42% YTD performance, but future growth in international markets looks promising. LULU's price-to-cash flow and gross profit ratios are currently at multi-year lows. Meanwhile, growth and buybacks are all going strong.