Lululemon Athletica Inc. (LULU) PT Lowered to $191 at JPMorgan

JPMorgan analyst Matthew Boss lowered the price target on Lululemon Athletica Inc. (NASDAQ: LULU) to $191.00 (from $224.00) while maintaining a Neutral rating.

The analyst comments "LULU reported 2Q EPS of $3.10 (above Street $2.87) driven by +7% Y/Y revenue growth (= Street), gross margin contraction of -110bps Y/Y to 58.5% (above Street 57.5% / mgmt’s 57.6% guide), and SG&A deleverage of -90bps to 37.7% (vs. Street 38.6%), translating to an operating margin of 20.7% (above Street 18.9%). Digging deeper, 2Q same-store-sales grew +1% c/c (below the Street at +2.4%) primarily driven by negative 3% Americas comps c/c (below Street -0.8%), which sequentially worsened over the course of the quarter despite taking higher than planned markdowns (-60bps headwind vs. mgmt’s -20-40bps forecast). Looking ahead, management lowered FY25 EPS to $12.77-$12.97 (-12% below midpoint of prior $14.58-$14.78 guide) based on (i) lowered +2-4% reported revenue growth y/y (vs. prior +5-7% guide and Street +5.5%), or +4-6% excluding the lap of the 53rd week, and (ii) lowered FY25 operating margins to down -390bps to 19.8% (below 22.1% prior & Street 21.6%). Near-term, management guided 3Q25 EPS to $2.18-$2.23 (~24% below the Street at $2.89) based on +3-4% reported revenue growth Y/Y (vs. Street +6.7%) and operating margins down - 560bps Y/Y to 14.9% (vs. Street 18.8%). This implies 4Q EPS of $4.89-$5.04 (~17% below Street $5.98) based on -2.5% reported revenue growth Y/Y (vs. Street 2.5%) and operating margins down -550bps Y/Y to ~23.4% (vs. Street 27.1%)."

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