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Lululemon Shows No Signs of Slowing Down
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Lululemon Shows No Signs of Slowing Down

Back on Thursday, Lululemon (NASDAQ:LULU) posted its earnings report, and delivered a shot across the bow to anyone who didn’t believe that it’s a growing operation. It’s a point investors are increasingly on board with, as Lululemon closed up 11.3% in Friday’s trading session.

The earnings report Lululemon posted came with some exciting tales of growth, and also an upbeat outlook for next quarter as well. It even stepped up its guidance, a point seldom seen these days. In fact, Lululemon also failed to bring out one thing that many retailers have been as of late: there were no warnings about slumping consumer demand, and that may be because of China.

One of the biggest reasons that Lululemon could hike guidance like it did was the impressive bout of sales coming out of China. Revenue in the Chinese market alone was up 79% according to Lululemon CEO Calvin McDonald. On the other hand, North American sales were only up 17%. With this in mind, the revelation that Lululemon planned to open 30 to 35 new stores, and most of these in China, shouldn’t come as a surprise to investors. Further, reductions in freight costs also helped give Lululemon a leg up since it could ship those items less expensively to where they were more in demand.

Analysts are also very much on Lululemon’s side. Thanks to 21 Buy ratings, two Holds, and three Sells, Lululemon stock is considered a Moderate Buy by analyst consensus. Further, it offers investors 13.13% upside potential thanks to its average price target of $413.43 per share.

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