U.S. markets closed
  • S&P 500

    -4.87 (-0.12%)
  • Dow 30

    +34.88 (+0.10%)
  • Nasdaq

    -20.90 (-0.18%)
  • Russell 2000

    +11.16 (+0.59%)
  • Crude Oil

    -0.88 (-1.08%)
  • Gold

    -3.80 (-0.21%)
  • Silver

    +0.53 (+2.33%)

    +0.0017 (+0.16%)
  • 10-Yr Bond

    -0.0230 (-0.65%)

    +0.0014 (+0.11%)

    -0.9620 (-0.71%)

    +129.84 (+0.77%)
  • CMC Crypto 200

    +2.91 (+0.72%)
  • FTSE 100

    -2.26 (-0.03%)
  • Nikkei 225

    -448.20 (-1.59%)

Jefferies reiterates Underperform rating on Lululemon stock

Yahoo Finance anchors discuss Wall Street analyst ratings for Lululemon stock.

Video Transcript

BRIAN SOZZI: All right, we're also watching some Calls of the Day here, folks. Let's start with Lululemon. Jefferies is reiterating its underperform rating and $200 price target ahead of the retailer's earnings report on Thursday evening, citing future concerns around international success and increases in promotions industrywide.

And Brad, I feel a little bit not on-trend here because this note is calling out a belt bag fad. Now, I've never heard of this. And I saw some of these bags on the Lululemon site. I don't know what you would even put in these belt bags, maybe a shot or two for the road. But they're not that big. They're kind of stylish, but still, they're concerned that this belt bag fad will just go away and that Lululemon will be exposed here and probably discounting a lot of this junk.

BRAD SMITH: I mean, the belt bag fad is one thing. (STRUGGLING) The belt bag-- oh, my gosh.

BRIAN SOZZI: That's tough. That's tough. They shouldn't even be selling it. Can they just rename it, Lululemon? Please, rename the thing.

BRAD SMITH: Isn't it just a fanny pack?

BRIAN SOZZI: No it's like a skinnier fanny pack. So I don't know what you put in it. I don't even think you put in your iPhone 13 in there.

BRAD SMITH: OK, I'm not going to try and pronounce the fad again anymore. But here's the thing. I think for Lululemon, what they've also been able to capitalize on is the number of people that are going out, spending on services in the form of vacations.

And what do you think about with that? If you're traveling now internationally because things have opened back up, then, yeah, you're going to get a belt bag or maybe a fanny pack or something to be able to travel with and carry those around.

I think that's a fad that has certainly persisted, and for good reason here over the summer, as people get back into that vacation spending or even the number of-- you know how hard it was to find just a roller case, travel case at the beginning of the year and even moving into the spring? It was terribly hard to find.

And so I think this just goes hand in hand with that and the number of people that were spending, specifically looking for the ability to travel safe, travel light, and then also just have a little stylish fad next to them.

BRIAN SOZZI: I want to push back on this call from Jefferies because I've been in Lululemon stores a lot the past month, just stocking up on new clothes. Maybe this is too much information, but I'll share it anyway. I paid $40 each for four pairs of underwear. Now, they make some of the best underwear in the game.

The stores were packed. I waited 15 minutes to check out. The line was almost out the door for this place, really throughout the month of July and for most of August. I mean, it's just a big month. But to that end, we have seen weakness in sales of athletic wear and various levels of apparel. We heard that from Kohl's. Heard it from Macy's. So to what extent is that going to impact Lululemon's guidance?

They are out here with some very big five-year targets. They're looking to double their revenue from last year 2021 to 2026. That's a big ask in an environment that is starting to slow down.

BRAD SMITH: My man, I got to introduce you to the BOPIS, buy online pickup in store, for Lululemon or any of these other places where you can just walk in, pick it up, be out the door.