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Lululemon stock falls after Bernstein analyst warns of 'reality check'

Yahoo Finance Live anchors discuss a Bernstein analyst’s downgrade on Lululemon stock.

Video Transcript

[AUDIO LOGO]

BRAD SMITH: Welcome back, everyone. Time for Cut for Time, three stories, one minute each. Let's start with this on the day. Bernstein is warning of trouble ahead for Lululemon. Downgrading the apparel maker from market perform to underperform and saying, "The expectation versus the reality gap is the biggest concern there." And this one from friend of the show Aneesha Berman or--

JULIE HYMAN: Aneesha Sherman

BRAD SMITH: Aneesha Sherman, excuse me. We've made it to the end of the show, this far. But they mentioned-- she had mentioned that after delivering 25% sales growth, 30-plus% earnings growth for five straight years, they've got a reset coming. And so we'll see if that proves to be the case when they report earnings next.

JULIE HYMAN: I bet you love this call, Brian Sozzi.

BRIAN SOZZI: I do. It's just-- it just cuts through all the BS out there. A lot of analysts, I think, are just dancing around the fact that this company is going to see sharply slowing growth this year, likely. And Aneesha's right on point here.

Our Josh Shafer, actually has more on this call now on the Yahoo Finance homepage. Check it out. But Aneesha saying there is a reality check coming to Wall Street. And I'm feeling it. I think this makes sense.

JULIE HYMAN: Yeah, and we have the Dee Dee Thomas shopping indicator as well. She walked into-- one of our folks here who talked to us about Bed Bath & Beyond and her shopping there. She walked into a Lululemon in Dallas, Texas. There were no discounts. She walked right out.

BRIAN SOZZI: Walked right out.