Lululemon Athletica (LULU) faces a mixed outlook among investors amid an expected “soft” Q1 US outlook countered by “robust international momentum,” UBS Securities said Monday in a report.
“China’s trends looks robust, and soft US checks over the last three to four quarters have not resulted in weak earnings or guidance,” UBS said. “We see a very slightly negative upside/downside skew.”
UBS said its data shows China momentum continuing, while industry web traffic indicates a deceleration for Lululemon.
“Whatever plays out, we, we sense a large group of investors will be surprised,” UBS said.
The investment firm kept its neutral rating on Lululemon and maintained the price target at $525.
Results for Q4 and the full year are expected Thursday.