Shaky Economy Dampens Forecast on Lululemon

A shaky economy and negative currency moves have dampened the forecast on yoga-wear retailer Lululemon Athletica Inc. (LULU), according to RBC Capital Markets.

Analyst Tal Woolley has slashed his price target on the Vancouver-based retailer to $17 from $30 but maintained his "outperform" rating on the shares.

He told clients:

Given the rapid depreciation in the Canadian dollar (down about 16% from the 2007 average), we anticipate management will have to revise down their guidance for 2008.

The analyst cut his earnings estimate to C$0.12 per share in the third quarter from C$0.13, and his 2008 and 2009 annual per share earnings forecast to C$0.67 and C$0.82, respectively, down from C$0.71 and C$0.94.

Mr. Woolley said:

While the company is not immune to the softer retail environment, we believe that Lululemon remains a compelling growth story with a differentiated product offering that is likely to continue to outperform its peers.

Lululemon is scheduled to report Q3 earnings on Thursday, December 11, before the market opens.

Comments

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Lululemon Athletica should report an strong 3Q
Associated Press at Forbes!
Not that Bad Lulu!

Jan 01 04:54 PM