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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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October 22, 2014
15:27 EDTLULUlululemon management to meet with William Blair
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04:57 EDTLULUlululemon partners with Dalai Lama Center
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October 16, 2014
10:01 EDTLULUOn The Fly: Analyst Downgrade Summary
Today's noteworthy downgrades include: Akamai (AKAM) downgraded to Market Perform from Outperform at Wells Fargo... CGG SA (CGG) downgraded to Reduce from Neutral at Nomura... Central Valley Community (CVCY) downgraded to Hold from Buy at Sandler O'Neill... DSM (RDSMY) downgraded to Neutral from Buy at Nomura... Disney (DIS) downgraded at Guggenheim... Francesca's (FRAN) downgraded to Underperform from Outperform at Macquarie... Netflix (NFLX) downgraded to Fair Value from Buy at CRT Capital... Nordstrom (JWN) downgraded to Neutral from Outperform at Macquarie... Norfolk Southern (NSC) downgraded at Credit Suisse... Rio Tinto (RIO) downgraded to Market Perform at Cowen... Seadrill (SDRL) downgraded to Reduce from Neutral at Nomura... Ternium (TX) downgraded to Neutral from Overweight at JPMorgan... Urban Outfitters (URBN) downgraded to Neutral from Outperform at Macquarie... Viacom (VIAB) downgraded at BofA/Merrill... eBay (EBAY) downgraded to Underperform from Buy at CLSA... lululemon (LULU) downgraded to Underperform from Neutral at Macquarie.
05:39 EDTLULUlululemon downgraded to Underperform from Neutral at Macquarie
Macquarie downgraded lululemon to Underperform after assuming coverage of the stock saying the company's expansion into Asia and Europe will drive a meaningful increase in spending. The firm lowered its price target for shares to $34 from $40.
October 13, 2014
14:02 EDTLULUlululemon's Q3 sales tracking below consensus, says ITG Research
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