RBC’s Howard Tubin and Courtney Willson are feeling a lot better about Lululemon Athletica (LULU) than they were before yesterday’s financial results:REUTERS
We believe we are starting to see the fruits of Lululemon’s labor with more positive impact to come over the coming quarters and years. With the balance of the assortment skewing more toward new/novel/unique product, we believe Lululemon is on the verge of comp re-acceleration and share price appreciation will likely continue.
Management has been hard at work over the last several months implementing new systems, processes and procedures to improve the merchandise assortment and set the stage for accelerating growth. In the current quarter we’d highlight: 1) the return to positive store traffic, 2) strength at the end of the quarter from the new fall transitional merchandise assortment, 3) new store productivity remaining strong, 4) the need for fewer markdowns, 5) leaner inventory, and 6) strength in the men’s business.
Shares of Lululemon have gained 3% to $45.05 at 2:15 p.m. today. And those pretenders, er, competitors, Gap (GPS) and Under Armour (UA). They’ve dropped 0.1% to $44.27 and 1.3% to $69.01, respectively.