Lululemon’s pumped-up promotions highlight merchandising flaws - Jefferies
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Jefferies is reiterating a bearish rating on Lululemon Athletica (NASDAQ:LULU) after some negative post-holiday channel checks.
Equity analyst Randal Konik explained that visits to Lululemon locations in January left his team increasingly pessimistic. In particular, Konik pointed to elevated inventory levels as a lingering concern.
âWe came away with three key takeaways,â he said. âLULU's promotional activity remains elevated, [we see] heightened category expansion risk with heavy markdowns in outerwear and light traffic in the footwear section of the store, [and] the belt bag fad has peaked and LULU is adding new colors and bigger logos to drum up demand, in our view.â
Konik reiterated an Underperform rating on the stock and maintained a Street-low $200 price target.
Read more on Raymond Jamesâ conversely bullish outlook.