Lululemon Athletica, a Canadian athletic clothing retailer, boosted its third-quarter same-store sales guidance today and predicted it would exceed its previous earnings forecast. The company now expects third-quarter same-store sales percentage growth in the mid-30 percent range YOY. The retailer previously predicted same-store sales growth in the mid to high teens.
I am cautious however. On a constant US dollar basis, Lululemon said the revised guidance translates into a mid-20 percent same-store sales increase above 2006. This type of so-called growth isn't going to continue. The company also said today it expects the sales increase to be partially offset by the currency impact on sales, general and administrative costs incurred in Canada.
Perhaps most importantly - I don't think that these guys are knocking it out of the park. Their stores don't do great business. Their products are astronomical for most purchasers. There are equivalent products that are priced more reasonably.
I'll miss today's run, but I think that there will be a fall when the growth proves not to be so strong. I'll miss that too.
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