Lululemon, (the store that sells your girlfriend those yoga pants) is down more than 20% today following a mixed earnings report and soft quarter outlook. An article on Zacks goes further into detail regarding the results:
the company’s comps trends have remained weak so far in first-quarter fiscal 2017 on account of soft traffic in stores and lower conversion on the eCommerce site. This led the company to provide bleak outlook for the fiscal first quarter.Lululemon posted adjusted earnings of $1.00 per share, which lagged the Zacks Consensus Estimate of $1.01 but leaped 17.6% from 85 cents earned in the year-ago quarter. Also, the bottom line was within the company’s guidance range of 96 cents to $1.01 per share
Was a 22% drop warranted, or is this an overreaction to the news?
Don't know about LULU specifically, but I am staying away from retail stocks right now. There are quite a few that I looked at and appear to be bargains, and I understand the "buy when everyone is fearful" adage, but man I cannot bring myself to step in given the headwinds retail is facing in general.
I think that retail is going to suffer for quite some more time before I even consider "buying when everyone is fearful".
I have been thinking the same on the sector. I have consistently been drawn to sectors when they are collapsing, but retail just seems to be stuck in a spiral downward. I was amazed at how bad Under Armour has been fairing especially in an economy that seems to be doing well. Does anyone have good insight on what is going on in the retail space?
God, I really hate these pants. I'm honestly going to start asking every chick on the first date what her favorite pair of yoga pants are. If she says anything other than "I get them at Walmart", I'm out. Lulu should give me a plaque or something for all these pants I've had to buy.
Management holding onto 2020 revenue target of $4 billion. Seems really unlikely after the guidance for FY 2017.
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