Oppenheimer Has Perform On Lululemon Athletica Inc.

Oppenheimer & Co. is out with a research report on Lululemon Athletica Inc. LULU and it has a Perform rating on shares after it reported earnings. In a note to clients, Oppenheimer & Co. writes, "LULU reported F2Q11 diluted EPS of $0.26, above our/consensus (and split-adjusted) $0.22/$0.23 and $0.15 LY. Revenue increased 39% to $212.3M on a 20% constant-dollar-comp (vs. 31% LY) and 3% DTC growth (to $18.6M). Gross margin rose 470 bps (210 product margin, 160 leverage non-merchandise costs, 100 forex), SG&A levered 80 bps (e-commerce operating cost improvements); operating margin increased 550 bps to 28%. LULU's differentiated product/shopping experience sets it apart and allows for ongoing full-price sell-through despite a challenged consumer. While 3Q and implied 4Q EPS guidance is in line with to slightly below consensus, LULU is traditionally conservative. We believe this is especially appropriate given escalating input/wage cost environment, more normalized inventories (leading to heavier markdowns) and an uncertain consumer." Shares of LULU are currently off $4.06 to $53.63, a loss of 7.04%‎ so far.