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Buy Lululemon (LULU) Stock at New Highs on Digital & Menswear Growth?

Benjamin Rains


Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains breaks down Lululemon’s LULU Q2 2019 financial results that wowed Wall Street last week. The episode then dives into what investors need to know from the yoga and athleisure retailer’s earnings call and what’s next, to help see if people should buy and perhaps hold the stock that has crushed its industry and sportswear giant Nike NKE.

At this point, many people who have never stepped foot in a yoga studio have heard about Lululemon’s rise to athletic apparel prominence. The Vancouver, Canada-based firm, which opened its first stand-alone store in 2000, ended Q2 with 460 stores. Lululemon’s success sparked the broader athleisure movement that includes everyone from industry powers Nike and Adidas ADDYY to Gap GPS, L Brands’ LB Victoria’s Secret and even Target TGT.

LULU shares soared a new 52-week and all-time high of $204.44 last Friday after the firm crushed Wall Street estimates on both the top and bottom lines. The firm’s sales jumped 22%, which marks the continuation of strong revenue growth. Lululemon’s women’s business remains impressive, but its men’s, digital, and international expansion will drive the firm’s broader growth over the next several years.

The firm has also expanded in Europe and Asia, with a focus on China. Plus, Lululemon’s portfolio goes far beyond athletic apparel these days, including outwear offerings that compete against Canada Goose GOOS and The North Face VFC. On top of that, the firm’s self-care products have grown, as the firm rolls out more membership tests in cities such as Chicago—where LULU recently opened a massive 20,000 square foot experiential store that could be key going forward.

Looking ahead, Lululemon’s growth outlook is stellar. Meanwhile, LULU, which is a Zacks Rank #2 (Buy), appears to be a standout in the broader retail industry, especially compared to department stores like Nordstrom JWN and Macy’s M.

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Click to get this free report lululemon athletica inc. (LULU) : Free Stock Analysis Report L Brands, Inc. (LB) : Free Stock Analysis Report Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report The Gap, Inc. (GPS) : Free Stock Analysis Report Nordstrom, Inc. (JWN) : Free Stock Analysis Report Target Corporation (TGT) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report NIKE, Inc. (NKE) : Free Stock Analysis Report Adidas AG (ADDYY) : Free Stock Analysis Report V.F. Corporation (VFC) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research