SALES SLOWING? BS
Analysts were expecting earnings of 33 cents per share on $328 million in revenue, Lululemon guided way above expectations, looking for earnings of 33 cents per share to 35 cents per share on revenue of $340 million to $345 million.
Revenue was much higher than most had anticipated. Assume for a moment that Lululemon hits the middle of the provided range ($342.5 million) and that analysts don't adjust their revenue figures. Then we're talking about a $14.5 million dollar beat on top line results.
The stock had risen substantially to near all time highs after they had drastically lowered estimates supposedly due to the black luon issue. FACT
The stock dropped back into the same area it had risen from after beating the reduced estimates and basically guiding in-line for the year compared to analysts forecasts. FACT
So the stock ultimately went up on bad news and then went down when they beat and guided in-line and of course the CEO mysteriously decides she is stepping down. It could totally be personal reasons but most likely she is stepping down for another reason. Maybe a fallout with the board, who knows.
If you are a big believer in this as a trade or a long term buy with plenty of high growth ahead then by all means buy.
I still own well in the money puts and may sell them at any time but this could test the lower $60's and if it breaks there the mid to lower $50's are in play.
The problem isn't this quarter -- there are enough new stores in untapped areas that they will do fine.
The problem is that the canadian stores have stopped growing -- womens' closets are tapped out, and the brand is no longer fresh. Plus, they are running out of places to put the stores -- the best locations are already taken, and the supply of women who want to drop $500 on pants + shirt + bra + jacket, all in polyester, is limited.