Lululemon Athletica inc. (NASDAQ:LULU) Holding Strong

Lululemon Athletica inc. (NASDAQ:LULU) beat expectations and reported stronger quarterly results. However, it gave a weaker outlook than anticipated owing to few temporary nagging issues like port delays and weather problems which by far as temporary in nature.

Why are analyst so optimistic about LULU?

LULU’s Share Price Soars Up

LULU’s shares rose up after investors were ensured that this outlook was based on temporary hindrances and did not quite reflect the innate glitches or obstacles for growth. Delays in the West Coast ports, currency related issues and weather factors were the main cause of temporary concern for Lululemon Athletica inc. (NASDAQ:LULU). After being reassured, investors chose to purchase LULU’s shares. The company witnessed more than 7% surge in its share price.

Analyst’s Estimate

Matthew Jacob, an analyst at ITG Investment Research commented that there is some relief in the investors’ circles after the company came out with an explanation for its weak estimates. This hasn’t dissuaded investors’ interests; ones who considered that LULU was into a bullish run, continue to do so. All and sundry now believe that company is witnessing a turnaround in prospects. However, Jacob expressed concern and caution, as the outlook seemed weaker owing to some external factors.

LULU Covered Lost Ground

Canadian Yogawear manufacturer LULU started facing issues once other major competitors moved into this market and started dominating the business. It had to recall its yoga pants as reviewers mentioned that they were too see-through. There was a massive rejig in the company’s structure; top executives departed.

Since then, the company has made for the lost grounds, improved its quality, expanded own product line, solved myriad of supply chain related problems and laid the foundations for better and faster international growth with time.

LULU Eyeing Commendable Expansion Opportunities

Lululemon Athletica inc. (NASDAQ:LULU) stated that its underlying demand remained consistent with several holiday period trends. It unveiled or reiterated its plans in near future to increase its expanse, open new stores and improve scopes for sumptuous investment opportunities. In this quarter, Vancouver based LULU forecasted that it would earn 31 to 33 cents for each share, though analysts at Thomson Reuters expect it to be 39 cents.

Abbott Michael

Abbott Michael

Michael joined US Markets Daily in 2009 and is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments.