By Anuja Bharat Mistry
(Reuters) – Lululemon Athletica shares jumped about 17% in early buying and selling on Friday as an upbeat annual forecast raised investor optimism for a strong vacation quarter and prompted Wall Street to take a extra bullish view on the inventory.
The athleisure maker has refreshed its clothes line with trendier types to draw youthful consumers and sustain with stiff competitors from newer manufacturers corresponding to Vuori and Alo.
It has additionally used focused advertising to drive gross sales in China, its second-largest market, the place its third-quarter income surged about 36%.
“Despite aggressive threats, Lululemon’s clients stay loyal,” Raymond James analyst Rick Patel mentioned.
At least 17 brokerages raised their value targets on the inventory after the corporate posted better-than-expected quarterly outcomes on Thursday.
Stifel was probably the most bullish among the many 36 brokerages protecting the inventory and bumped up its goal by $68 to $438, effectively above Wall Street’s median estimate of $374.10. The firm’s shares had been buying and selling at $404.64 and had been set for his or her finest day since June 1, 2018, if features maintain.
Lululemon was additionally upbeat about gross sales in the course of the essential Thanksgiving weekend, reflecting the optimism at different specialty retailers, together with Victoria’s Secret and cosmetics retailer Ulta Beauty.
Victoria’s Secret and Ulta Beauty additionally reported sturdy outcomes on Thursday, sending their shares up about 7% and 10%, respectively, in common buying and selling.
Lululemon’s ahead earnings a number of for the subsequent 12 months, a typical benchmark for valuing shares, was 23.03, in contrast with Nike’s 25.91 and Under Armour’s 27.10.
Lululemon shares are down almost 33% for the yr.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Anil D’Silva)
