It doesn't matter when you bought. You're dead unless you cut your losses early. I see $50 in the short run. Period.
Sentiment: Strong Sell
This is debatable, obviously, but I think the drop yesterday factors in much of the flat sales forecast. There may be a little more drop left. I am not sure recovery will happen right away (in the next month), but if the new executive team can start to show good moves and re-gain investor confidence, there could be a nice bounce back. Truth is, no one can be sure.
(END) Dow Jones Newswires
December 13, 2013 08:57 ET (13:57 GMT)
Copyright (c) 2013 Dow Jones & Company, Inc.
*DJ Lululemon Cut to Neutral From Outperform by Credit Suisse LULU
Dec 13, 2013 08:57:00 (ET)
- the 52-week low of $59.60 set on Jun 21, 2013
- the breakaway gap from $59.15 to $53.44 which occurred on Jan 10, 2012
- and finally the 24-month low of $42.75 set on Dec 15, 2011
Bottom line: $59 to $59.50 looks like a major technical line in the sand. Recently, institutions have been keeping it propped up - most likely as part of a distribution strategy to leave retail holding the "buy the dip" bag. Breaching $59 could prove pretty dramatic.
With FLAT sales forecast for next quarter... why buy NOW?? if next quarter they
come up with the same forecast for the 2 snd quarter.. then the "growth story" will be
confirmed DEAD and stock will tank to under 30.... STAY AWAY from LULU thru
March and possible even September 2014...
Yep, I bought in yesterday... June 2014 $65 calls... guess I will be watching closely. It seems likely to go up some in the next month, but probably earnings of next quarter or two will make the big difference. IMHO.
Wall Street analysts, notoriously adept at finding good news everywhere they look, would point out that there is definitely a silver lining for all those lululemming dip buyers, and that is there will be plenty of dips to buy in the days and weeks ahead! ;)
I guess the good news is a dip buyer yesterday can look forward to losing only $1/share by next Christmas. I thought this was supposed to be a "fast" money play, but that sounds more like a slow, torturous bleed to me.
The growth story is in jeopardy raising risk levels significantly,
the controversy has caused significant damage and is here to stay for a while
Quality of the product they sell is now considered DOUBTFUL by their customers
who will hence refrain from purchases any time soon.
With falling sales, inventory is going to become a serious problem one or two
quarters from now...
Take all this into consideration, and you got a stock that DOES NOT DESERVE any
PREMIUM valuations.. atleast for now... so since the 2014 EPS is projected at
2.47... I would give a 15 max PE giving us a PPS of around $ 37.50
Once it leaves the 60 handle... it may take years for it to regain it... STRONG SELL.
to early my friend. The management team needs to learn to keep their mouths shut and until they can start apologizing for their mistakes and make amends they are the perfect short candidate. I'm with radmok on this one, either short or wait until after the holidays for signs of a lesson learned.
Too soon... retail is in trouble... LULU is in controversy.. trendline is broke
what is the hurry...?? Patience... wait and in late march when the second
earnings report is out... pick up at low 40''s.. until then load up on OMED
all u can... she doubles in a few weeks..
Wow! Ms. Kiavalya's anti-LULU blog has already earned over 8,000 likes and 1300 shares on Facebook in less than 36 hours (if I recall correctly it took Ms. Petrzela's blog about 10 days to reach those numbers). "Negative PR" indeed! And rather than dying down and going away, as I think most clueless analysts assumed (or at least wished and hoped), the backlash is only picking up steam. It's a new world. And it's called social media. Insult your customers at your peril - never more true than today when such insults can go viral literally overnight (it was amazing to see how quickly this controversy was picked up by the Colbert Report - now that was a wide audience). But honestly, it's the emotion coming from the core base of yogi brand ambassadors that threatens to shatter this "cult" and bring the company to its knees. Replacing high profile defecting brand ambassadors will be difficult enough and take significant time. But trying to counter the devastating damage their collective influence is now having as their message moves with lightning speed in a direction opposition to that for which LULU originally recruited them for (that is, their organic social networks of yoga students, a.k.a. "yoga apparel buyers", are now hearing "don't buy lulu - and here's why in case you missed it" on a daily basis). You can't just snap your fingers and make this problem go away. And the timing couldn't be worse. New management will be on a steep learning curve for a while. Remarkably, they've still got to get their quality control and supply chain issues ironed out. And they feel they need to expand internationally to keep shareholders interested, even though what they really need to focus on for now is figuring out how to survive the onslaught of competition by major players aggressively ramping up their presence in LULU's already established niche markets.