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Jefferies maintained a bearish view on Lululemon Athletica (NASDAQ: LULU) on Tuesday with new price data and search interest trends pointing lower for the normally strong brand.
Analyst Randal Konik and the team said Lululemon (LULU) web visits fell 22% month-over-month in February and year-over-year growth slowed for the third straight month. Additionally, store checks indicated interest in fanny packs may be waning in a development that could affect upcoming earnings reports.
In terms of pricing, LULU was seen increasing discounts in January to a combined 19.7% from 18.7% a year ago and 15.8% in December.
Jefferies’ conclusion is that the consensus estimates on Lululemon (LULU) may be too high given the increasingly competitive sportswear market. The company’s rating on LULU remains at Underperform, while the $200 price target represents downside potential of more than 30%.
Lululemon (LULU) is expected to release its FQ4 earnings report at the end of March. Check consensus estimates and earnings history.
