Lululemon soars after defying inflation fears in retail
Kevork Djansezian

Analysts on Lululemon Athletica (NASDAQ:LULU) are largely positive after the athletic apparel company's Q2 comparable sales and margin performance dazzled.
Bank of America reiterated a Buy rating on Lululemon (LULU) following the strong beat/raise and pointed to the encouraging early read for Q3.
Analyst Lorraine Hutchinson said new customer growth for LULU was an impressive 20% in the quarter. Those sales gains were balanced by segment (men's +27% y/y, women's +24%, accessories +80%) and by geography (North America +28%, international +35%). Hutchinson and team still see meaningful untapped growth opportunities internationally with Europe and China significantly. Opportunities are seen with new categories like on the move, hike, golf, tennis, footwear. The firm has a price objective of $400 on LULU on its view that there is plenty of upside potential.
Morgan Stanley raised its price target on Overweight-rated Lululemon (LULU) to $343 after taking in the report. Analyst Alex Straton said LULUâs sales and EPS results significantly outpaced expectations as the company recorded its 9th consecutive beat. The firm sees room for ongoing positive EPS revisions and continues to see a re-rating opportunity.
Quo Vadis also recommended staying long LULU. Analyst John Zolidis said he believes LULU is one of the sales and earnings growth stories in retail with a strong brand, innovative product and significant international expansion opportunity.
BMO Capital is more cautious on Lululemon (LULU) with a Market Perform rating in place. "There's no questioning LULU's brand strength and we expect impressive sales ahead, but with shares here, we cannot ignore growing markdown pressures in reported KPI's (though absent from mgmt color), which makes sense given growing inventory/slowing turns," warned analyst Simeon Siegel.
Shares of Lululemon (LULU) shot up 9.78% premarket on Friday to $323.25.
Dig into the Lululemon earnings call transcript.