What's Next For Lululemon (LULU) Stock?

Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains breaks down Lululemon’s (NASDAQ:LULU) recent third quarter financial results. The episode then takes a look at Lululemon’s future as it expands in Asia and rolls out new offerings in order to reach its 2020 goals.

Right off the bat, shares of LULU plummeted Friday after the company reported its Q3 earnings results after the closing bell last Thursday. The company’s adjusted quarterly earnings surged and topped our Zacks Consensus Estimate. Lululemon’s top-line growth also surpassed estimates. Plus, the yoga apparel firm’s comparable store sales surged and its e-commerce comps skyrocketed.

The company sees its newer outwear division as a “material comp driver for the quarter” across both its men's and women's segments. Lululemon currently sells men’s and women’s parkas for as much as $600 as it tries to compete against Canada Goose (NYSE:GOOS) , V.F. Corporation’s (NYSE:VFC) The North Face, and other high-end brands. Lulu’s is also testing out a new loyalty program as retailers from Nordstrom (NYSE:JWN) to Target (NYSE:TGT) try to navigate an Amazon (NASDAQ:AMZN) -obsessed retail age.

Meanwhile, Lululemon hopes to break into the self-care market where giants such as Walgreens (NASDAQ:WBA) have partnered with trendy, subscription-based services in order to boost sales and attract new customers. Maybe more importantly, Lululemon is actively expanding its presence in key Asian regions.

With that said, Lululemon appears poised to continue to challenge industry giants Nike (NYSE:NKE) , Adidas (OTC:ADDYY) , Under Armour (NYSE:UAA) , and Gap (NYSE:GPS) as it fights to reach its own lofty, 2020 growth projections. But, Lululemon’s stock price has started to fade recently for a variety of reasons.

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