Subscribe in a reader ITZ suggests entering Lululemon Athletica Inc. (LULU) around $58 level, taking a 1/2 position, looking to add to position should it pullback further. ITZ mentioned several times on Twitter, that $LULU could test $55.
LULU crashed by more than 11% last Thursday as the company's earnings report included a worrisome reduction in sales and earnings guidance. The numbers for the third quarter where actually better than expected, LULU reported a year-over-year increase of 20% in revenue to $379.9 million. They reported better than expected earnings per share of $0.45 versus $0.39 in year-ago quarter. Wall Street analysts were on average expecting earnings of $0.40 per share.
Guidance was a big disappointment, though: Management reduced its sales expectations for the fourth quarter of fiscal 2013 to between $535 million and $540 million versus a previous guidance of between $565 million and $570 million.
Earnings: FY ending Jan 2014 $1.95 & 2015 est $2.36; trailing p/e 31.8 & forward p/e 24.9 with a 1.61 PEG.
ITZ's believes management playing it safe by with a low guidance outlook, so it can easily over deliver in the coming quarters. ITZ entry point $58.50
3 comments:
ADDED 1/2 position @ $59.40, current avg cost = $58.95
STOP set @ $58
$LULU $58.00 STOP Hit---EXIT TRADE avg cost $58.95 ($0.95) loss -1.6% - may re-enter trade down the road...
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