Lululemon still has a 'long runway for growth' after crushing earnings

Lululemon’s positive earnings report Thursday signifies it could be in for some good times ahead.

The hip athletic-wear retailer earned an adjusted $US0.55 cents per share, beating the Bloomberg consensus of $US0.46. Revenue came in at $US649 million, topping the $US616 million estimate.

And Lululemon is set to keep up the strong results and capture more market share, Jefferies analyst Randal Konik wrote in a note out to clients Friday morning. “The momentum is continuing into second-quarter, as the company not only benefits from the athleisure cycle, but also appears to be growing mkt share at an accelerated pace,” he said.

Lulu’s revenue growth has moved in the opposite direction of its peers over the span of a year.

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And that trend could very well continue, as Lulu is showing better products, a better ability to sell online, and a more acute customer acquisition strategy, Konik said. The retailer’s online sales grew 60% year-over-year. “Lulu still has a long runway for growth with product innovation, improved digital execution, and improved customer acquisition strategies,” he wrote.

While Konik is optimistic, he pointed out that Lulu’s share price currently reflects its future performance. “We see plenty of growth opportunity ahead, but believe valuation adequately reflects this growth,” he wrote.

Lulu is up more than 11% Thursday and has gained 48.29% this year.

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