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News Breaks
August 8, 2014
10:32 EDTLULUlululemon advances after founder sells shares to PE investor
Shares of yoga apparel maker lululemon (LULU) are climbing after the company's founder agreed to sell half of his stake. However, research firm Jefferies wrote that the company's inappropriate strategy is likely to keep its margins under pressure. WHAT'S NEW: lululemon founder Chip Wilson agreed to sell about half of his stake in the company, representing nearly 14% of its total shares, to private equity firm Advent International, the company reported last night. Wilson will receive about $845M for the shares, and Advent will obtain two seats on luluemon's board. BACKGROUND: Wilson had said before lululemon's annual meeting in June that he would vote against re-electing the company's board because he thought it was too focused on short-term issues. The founder then hired Goldman Sachs as a financial adviser. Last year, after lululemon had to recall some of its pants because they were too shear, Wilson blamed the problem on the shape of some women's bodies. He resigned his position as Chairman of lululemon's board after the statement caused controversy. ANALYST REACTION: In a note to investors today, Jefferies analyst Christian Buss wrote that the sale of Wilson's shares is positive for lululemon, as it will enable the company's board to cease being distracted by bickering and focus on developing and carrying out a strategic plan. However, Buss still believes that the company is incorrectly looking to expand its products to new markets, categories and demographic groups. Such a strategy is inappropriate, given the significant challenges the company has faced with its core products and customers, the analyst contended. Although lululemon's brand is still strong, its margins are likely to remain under pressure as long as it continues its current strategy and its earnings growth is likely to be limited as a result, Buss forecast. He kept a $38 price target and Neutral rating on the stock. PRICE ACTION: In early trading, lululemon climbed 84c, or 2.2%, to $39.87.
News For LULU From The Last 14 Days
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August 28, 2015
07:12 EDTLULUWilliam Blair names 21 stocks best positioned for volatile markets
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August 27, 2015
07:56 EDTLULULululemon September weekly volatility elevated into Q2 and outlook
Lululemon 9/11/15 weekly call option implied volatility is at 66, September is at 61, October is at 48; compared to its 52-week range of 25 to 63, suggesting large near term price movement into the expected release of Q2 results on September 10.
07:52 EDTLULUBarclays would be a buyer of lululemon into the Q2 report
Barclays analyst Matt McClintock believes lululemon will report meaningful upside to his 7.7% total comp estimate when it reports Q2 earnings on September 10. Channel checks suggest a strong consumer response to new tops introduced in Q2 with stock outs above 50%, promising Google search activity, and momentum in men's. McClintock believes his earnings estimates will prove conservative and is a buyer into the report. Barclays' rates lululemon an Overweight with an $85 price target on shares.
August 18, 2015
10:00 EDTLULUOn The Fly: Analyst Initiation Summary
Today's noteworthy initiations include: Abercrombie & Fitch (ANF) initiated with an Underperform at Wolfe Research... Abiomed (ABMD) initiated with a Buy at CRT Capital... Aeropostale (ARO) initiated with a Peer Perform at Wolfe Research... American Eagle (AEO) initiated with an Outperform, Top Pick at Wolfe Research... American Electric (AEP) initiated with a Buy at Mizuho... Benefitfocus (BNFT) initiated with an Overweight at First Analysis... Blue Buffalo Pet Products (BUFF) initiated with an Equal Weight at Morgan Stanley... Capitala Finance (CPTA) initiated with an Equal Weight at Stephens... Chico's (CHS) initiated with a Peer Perform at Wolfe Research... Children's Place (PLCE) initiated with an Outperform at Wolfe Research... Chimerix (CMRX) initiated with an Outperform at FBR Capital... Ciena (CIEN) initiated with a Market Perform at Northland... Crane (CR) initiated with an Outperform at William Blair... Entergy (ETR) initiated with a Neutral at Mizuho... Express (EXPR) initiated with an Outperform, Top Pick at Wolfe Research... Finisar (FNSR) initiated with a Market Perform at Northland... Francesca's (FRAN) initiated with a Peer Perform at Wolfe Research... Gap (GPS) initiated with an Underperform at Wolfe Research... Infinera (INFN) initiated with an Outperform at Northland... International Game (IGT) initiated with a Buy at Union Gaming... Juno Therapeutics (JUNO) initiated with an Outperform at FBR Capital... L Brands (LB) initiated with a Peer Perform at Wolfe Research... Luca Technologies (LUCA) initiated with an Outperform at Northland... Lumentum (LITE) initiated with an Outperform at Northland... M/A-COM (MTSI) reinstated with a Buy at Jefferies... MRV Communications (MRVC) initiated with an Outperform at Northland... Michael Kors (KORS) initiated with a Peer Perform at Wolfe Research... NN, Inc. (NNBR) initiated with a Buy at Stifel... NeoPhotonics (NPTN) initiated with an Outperform at Northland... Oclaro (OCLR) initiated with an Outperform at Northland... Scientific Games (SGMS) initiated with a Buy at Sterne Agee CRT... SolarCity (SCTY) initiated with a Neutral at UBS... Summit Materials (SUM) initiated with a Neutral at Citi... Tech Data (TECD) initiated with an Underperform at BofA/Merrill... Urban Outfitters (URBN) initiated with a Peer Perform at Wolfe Research... Zumiez (ZUMZ) initiated with an Underperform at Wolfe Research... lululemon (LULU) initiated with a Peer Perform at Wolfe Research.
August 17, 2015
16:57 EDTLULUlululemon initiated with a Peer Perform at Wolfe Research
Target $65.

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