Lululemon rips higher as execs talk up global push


Lululemon (LULU +8.8%) CEO Laurent Potdevin notes the company is seeing signs of demand for its products in parts of Asia and Europe.

The company will look for "deep local knowledge" as it strikes into new territories. Onboarding of talent in Asis is already taking place and the company is scouting locations. Execs see progress ramping up quickly.

Comparable-store sales should improve markedly after Q1. Lululemon will start lapping a period of soft sales following its PR fiasco over its luon yoga pants and the new products will start playing a factor.

The tone on supply issues and product flow is confident.

Earnings call webcast

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Comments (1)
  • meta9999
    , contributor
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    Only the positives were noted here, and they were, for the most part, exaggerated. I for one am not so sure comp store sales will improve "markedly". Comp sales started to slow before the Luon issue, and now they are actually declining. The webcast mentioned lowered margins due to product mix. Either the new products are selling at a lower margin, or the yoga wear is being marked down. This implies that the stock should trade at a lower P/E than it had previously. Future growth overseas should help offset some of this, but competition there could prove a bit tougher than in North America. I would take this recent rally as an opportunity to sell shares in the low 50s. LULU is still a great company, but it is fully priced here and vulnerable on many fronts.
    27 Mar 2014, 09:30 PM Reply Like
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