3 Problems With Lululemon Athletica's (LULU) Quarter - Nomura

Nomura/Instinet analyst Simeon Siegel reiterated a Neutral rating and $157.00 price target on Lululemon Athletica Inc. (NASDAQ: LULU) noting 3 problems with the quarter:

1) 1Q was smallest comp & EPS beat since 3Q17

2) EBIT margin saw smallest YoY growth since 3Q17 (& missed St. for first time since 2Q17)

3) large CFO outflow for first time since at least 2011

That said, the analyst recognizes the strength of the reported numbers: Comps beat guidance for +LDD, with a HSD store and ~35% DTC. Comp guidance for 2Q was above Street Consensus and, if history is any indication, will also prove light. Gross margin improved +85bp vs. guidance for “modest expansion”. Guidance for 2Q of flat to up modestly is good especially when considering the company historically beats by ~400bp.

For an analyst ratings summary and ratings history on Lululemon Athletica Inc. click here. For more ratings news on Lululemon Athletica Inc. click here.

Shares of Lululemon Athletica Inc. closed at $181.72 yesterday.

You May Also Be Interested In

• Take-Two Interactive (TTWO) PT Raised to $368 at BofA Securities
• Delta Air Lines (DAL) PT Raised to $107 at UBS Ahead of Q2 Results
• Globe Life (GL) PT Raised to $215 at TD Cowen