Investors trying to anticipate which way shares of Lululemon Athletica Inc. (NASDAQ:LULU) will go following the company's earnings report on Thursday will be digging into a slew of data over the coming days. From retail trend reports to consumer spending data, coming up with a prediction of which way shares will move will be a difficult task, to say the least.
Lululemon has had a number of surprising quarters of late (good and bad, although mostly not so good). Managing inventory levels has turned out to be quite the problem for Lululemon, with newly released fashion lineups underwhelming consumers.
Add on top of that the recent closure of most of the company's Ivivva stores, stores that were initially opened to appeal to younger females (most of which are being re-purposed), it appears that some of the recent experiments have not worked out the way management would have liked, leading to the recent drop in the company's stock price which has presented a buying opportunity, as the stock price has rebounded more than 20% from its low following news of the Ivivva closures in late Spring.
Lululemon’s upcoming earnings release will provide investors with more insight into how the company’s growth initiatives have been coming along.
With one of the strongest balance sheets among its peers, I expect the recent store closures will weigh somewhat on the company’s debt-free balance sheet, however, the long-term prognosis for the company remains strong in my opinion due to Lululemon’s rock solid balance sheet and industry-leading margin generation.
Invest wisely, my friends.
Related Stories
