Lululemon's Long Term Growth Potential Remains Better than Peers - RBC

Tal Woolley at RBC Capital Markets almost doubled his target price on Lululemon Athletica Inc. (LULU) on Wednesday, even though the retailing analyst anticipates the fitnesswear retailer’s first-quarter earnings to come in at C$0.07, a penny below market consensus.

“While growth is expected to slow in 2009, we believe the company’s long-term growth potential remains significantly better than that of most of the peer group,” he wrote in a note to clients, maintaining his rating of outperform on the stock and raising his price target to C$17 from C$9.

We continue to be impressed by the spring/summer merchandise assortment, as we believe the consumer responded well to the liberal use of colour. We are also encouraged by the newer and expanded offerings in the running, swimwear and casual sportswear lines [which will likely help bring new customers into the store].

Mr. Woolley expects same-store sales will likely decline 10% to 12%, based on currency fluctuations and negative leverage on buying and occupancy. He said slight improvements in an apparel industry hard hit by the recession could cause upwards earnings revisions later in the year and in 2010.

Comments

[Weston:]

Living in the same city it is true, and especially when other women find this out Im sure they would rather by something that makes them feel more flattering. Happiness is a good thing to invest in


On Jun 10 10:05 PM Amish Rake Fighter wrote:

> To be quite frank, Lululemon makes clothing that is extremely flattering
> to women's rumps. I live in Vancouver, I see it every day everywhere
> and the place on 4th Avenue is always packed.
>
> It's an investment I can really get behind

Jun 11 02:30 AM