Lululemon Athletica Inc. (LULU) Has More Opportunities For Margin Expansion, EPS Increases At Susquehanna

Susquehanna analyst Sam Poser reiterated a Positive rating and $210.00 price target on Lululemon Athletica Inc. (NASDAQ: LULU) after the company reported 1Q19 EPS/FX-neutral SSS of $0.74/+16.0% vs. the Street's $0.70/+11.5%. B&M SSS increased 8% (FX neutral) and digital SSS increased 35% (FX neutral). Traffic was the primary reason for the SSS beat vs. Street estimates, increasing 8% and 41%, in-store and on-line, respectively.

The analyst sees several opportunities for margin expansion including 1) benefits from product mix; 2) improving sourcing and supply chain capabilities; and 3) increasing penetration of digital. This comes as the company invests in 4 areas: 1) omni-channel enhancements; 2) product innovation; 3) expanding the brand's footprint in both ecommerce and B&M channels; and 4) improving supply chain processes.

The analyst stated "LULU's nascent loyalty program, which has launched in only three cities in North America thus far, offers opportunity to further enhance LULU's unmatched customer engagement as well as develop another revenue stream".

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.

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