Lululemon’s 4Q Guidance Boost Seen As Positive Despite Share Retreat

Lululemon’s upgrade to its 4Q outlook was perhaps a little modest for investors, with the stock edging 0.6% lower. While the athletic apparel brand has a history of beating its 4Q expectations, William Blair analysts Sharon Zackfia and Dylan Carden say the shares retreated due to “revised fourth-quarter outlook only slightly ahead of consensus and a 30%-plus gain in the stock over the last three months.” However, William Blair maintains its outperform rating thanks to its relatively high earnings visibility “courtesy of a higher-income customer demographic and strong brand momentum (strongest global market share gainer in adult active apparel industry over the past four years) and significant opportunity to grow domestic brand awareness.”

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